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Tesco Corp (NAS:TESO)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

TESO' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -0.81
Current: -2.71

-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 * 0.7972+0.528 * 1.734+0.404 * 1.0606+0.892 * 0.8268+0.115 * 0.9253
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1187+4.679 * -0.0801-0.327 * 0.6923
=-2.71

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $87.6 Mil.
Revenue was 74.451 + 91.67 + 134.541 + 141.946 = $442.6 Mil.
Gross Profit was -2.29 + 8.375 + 19.971 + 29.499 = $55.6 Mil.
Total Current Assets was $304.2 Mil.
Total Assets was $540.1 Mil.
Property, Plant and Equipment(Net PPE) was $189.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.7 Mil.
Selling, General & Admin. Expense(SGA) was $46.5 Mil.
Total Current Liabilities was $55.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -27.49 + -8.252 + -1.807 + 7.486 = $-30.1 Mil.
Non Operating Income was -1.258 + -2.95 + -1.565 + -3.174 = $-8.9 Mil.
Cash Flow from Operations was -0.689 + 2.374 + 3.526 + 16.908 = $22.1 Mil.
Accounts Receivable was $132.9 Mil.
Revenue was 145.106 + 121.398 + 136.553 + 132.248 = $535.3 Mil.
Gross Profit was 34.651 + 25.505 + 26.665 + 29.687 = $116.5 Mil.
Total Current Assets was $388.5 Mil.
Total Assets was $646.1 Mil.
Property, Plant and Equipment(Net PPE) was $205.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.1 Mil.
Selling, General & Admin. Expense(SGA) was $50.3 Mil.
Total Current Liabilities was $96.6 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)
=(87.602 / 442.608) / (132.899 / 535.305)
=0.19792232 / 0.24826781
=0.7972

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)
=(8.375 / 535.305) / (-2.29 / 442.608)
=0.21764788 / 0.12551739
=1.734

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 - (304.214 + 189.307) / 540.094) / (1 - (388.493 + 205.098) / 646.126)
=0.08623129 / 0.08130767
=1.0606

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
=442.608 / 535.305
=0.8268

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))
=(41.081 / (41.081 + 205.098)) / (41.652 / (41.652 + 189.307))
=0.16687451 / 0.1803437
=0.9253

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)
=(46.49 / 442.608) / (50.259 / 535.305)
=0.10503651 / 0.09388853
=1.1187

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 + 55.914) / 540.094) / ((0 + 96.621) / 646.126)
=0.10352642 / 0.14953894
=0.6923

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
=(-30.063 - -8.947 - 22.119) / 540.094
=-0.0801

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 -2.71 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.99531.18471.34531.13791.11261.050.92290.88080.76230.7972
GMI 0.96430.93630.98971.01910.98511.01221.02011.0521.19661.734
AQI 0.96020.91970.93760.93860.93971.0051.02131.10511.2171.0606
SGI 0.94290.8980.9090.94890.98361.02921.03631.03450.98860.8268
DEPI 0.9590.96780.93121.0131.00171.03251.05280.97660.95330.9253
SGAI 1.01751.05971.02191.16341.10771.03071.08341.03961.00711.1187
LVGI 0.69590.7930.83080.98630.99530.99320.9020.8480.75220.6923
TATA 0.0086-0.0067-0.0134-0.0871-0.0816-0.0736-0.0676-0.0192-0.0389-0.0801
M-score -2.44-2.44-2.29-2.84-2.82-2.74-2.79-2.54-2.62-2.71
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