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Tesco Corp (NAS:TESO)
Beneish M-Score
-2.62 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Tesco Corp has a M-score of -2.62 suggests that the company is not a manipulator.

TESO' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -0.81
Current: -2.62

-3.46
-0.81

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -0.81. The lowest was -3.46. And the median was -2.29.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Tesco Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.7623+0.528 * 1.2001+0.404 * 1.217+0.892 * 0.9886+0.115 * 0.9533
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0073+4.679 * -0.0386-0.327 * 0.7522
=-2.62

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $102.9 Mil.
Revenue was 91.67 + 134.541 + 141.946 + 145.106 = $513.3 Mil.
Gross Profit was 8.375 + 19.971 + 29.499 + 34.378 = $92.2 Mil.
Total Current Assets was $333.4 Mil.
Total Assets was $589.2 Mil.
Property, Plant and Equipment(Net PPE) was $198.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.4 Mil.
Selling, General & Admin. Expense(SGA) was $50.5 Mil.
Total Current Liabilities was $73.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -8.252 + -1.807 + 7.486 + 12.74 = $10.2 Mil.
Non Operating Income was -2.95 + -1.565 + -3.174 + 0.975 = $-6.7 Mil.
Cash Flow from Operations was 2.374 + 3.526 + 16.908 + 16.822 = $39.6 Mil.
Accounts Receivable was $136.5 Mil.
Revenue was 121.398 + 136.553 + 132.248 + 128.968 = $519.2 Mil.
Gross Profit was 25.505 + 26.665 + 29.687 + 30.097 = $112.0 Mil.
Total Current Assets was $387.4 Mil.
Total Assets was $641.5 Mil.
Property, Plant and Equipment(Net PPE) was $202.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.9 Mil.
Selling, General & Admin. Expense(SGA) was $50.7 Mil.
Total Current Liabilities was $106.7 Mil.
Long-Term Debt was $0.0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(102.861 / 513.263) / (136.484 / 519.167)
=0.20040603 / 0.26289036
=0.7623

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(19.971 / 519.167) / (8.375 / 513.263)
=0.2156416 / 0.17967981
=1.2001

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (333.433 + 198.011) / 589.167) / (1 - (387.418 + 202.406) / 641.467)
=0.09797392 / 0.08050765
=1.217

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=513.263 / 519.167
=0.9886

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(40.904 / (40.904 + 202.406)) / (42.397 / (42.397 + 198.011))
=0.16811475 / 0.17635436
=0.9533

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(50.465 / 513.263) / (50.677 / 519.167)
=0.09832191 / 0.09761214
=1.0073

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((0 + 73.707) / 589.167) / ((0.007 + 106.685) / 641.467)
=0.12510375 / 0.166325
=0.7522

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(10.167 - -6.714 - 39.63) / 589.167
=-0.0386

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Tesco Corp has a M-score of -2.62 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Tesco Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.12260.75070.91260.96110.82771.27421.19081.03031.13790.8808
GMI 0.95870.75581.17960.89612.45070.54510.92990.93821.01911.0546
AQI 0.96020.66831.02490.83011.15620.94040.93770.9160.93861.1051
SGI 1.47351.90221.19731.15690.66711.06111.35471.07830.94891.0345
DEPI 0.89010.92431.0591.01340.82161.01241.03690.93691.0130.9766
SGAI 0.96380.67451.01740.96391.33611.01530.770.84591.16351.0398
LVGI 1.77621.07921.03810.82530.54871.04831.46550.75090.98630.848
TATA -0.04440.07980.0208-0.0544-0.1499-0.10310.01830.0571-0.0871-0.0194
M-score -2.45-1.77-2.19-2.69-2.74-2.94-2.07-2.08-2.84-2.54

Tesco Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.03030.99531.18471.34531.13791.11261.050.92290.88080.7623
GMI 0.93830.96430.93630.98971.01910.98511.01461.02251.05461.2001
AQI 0.9160.96020.91970.93760.93860.93971.0051.02131.10511.217
SGI 1.07830.94290.8980.9090.94890.98361.02921.03631.03450.9886
DEPI 0.93690.9590.96780.93121.0131.00171.03251.05280.97660.9533
SGAI 0.84591.01751.05971.02191.16341.10771.03091.08351.03981.0073
LVGI 0.75090.69590.7930.83080.98630.99530.99320.9020.8480.7522
TATA 0.04450.0086-0.0067-0.0134-0.0871-0.0816-0.0733-0.0673-0.019-0.0386
M-score -2.14-2.44-2.44-2.29-2.84-2.82-2.74-2.79-2.54-2.62
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