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Tesco Corp (NAS:TESO)
Beneish M-Score
-2.54 (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 -2.54 suggests that the company is not a manipulator.

TESO' s 10-Year Beneish M-Score Range
Min: -2.94   Max: -1.63
Current: -2.54

-2.94
-1.63

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -1.63. The lowest was -2.94. And the median was -2.38.


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 * 0.8808+0.528 * 1.0546+0.404 * 1.1051+0.892 * 1.0345+0.115 * 0.9766
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0398+4.679 * -0.0194-0.327 * 0.848
=-2.54

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $128.7 Mil.
Revenue was 134.541 + 141.946 + 145.106 + 121.398 = $543.0 Mil.
Gross Profit was 19.971 + 29.499 + 34.378 + 25.505 = $109.4 Mil.
Total Current Assets was $360.7 Mil.
Total Assets was $619.3 Mil.
Property, Plant and Equipment(Net PPE) was $202.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.0 Mil.
Selling, General & Admin. Expense(SGA) was $53.2 Mil.
Total Current Liabilities was $91.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -1.807 + 7.486 + 12.74 + 3.018 = $21.4 Mil.
Non Operating Income was -1.565 + -3.174 + 0.975 + -3.345 = $-7.1 Mil.
Cash Flow from Operations was 3.526 + 16.908 + 16.822 + 3.324 = $40.6 Mil.
Accounts Receivable was $141.2 Mil.
Revenue was 136.553 + 132.248 + 128.968 + 127.095 = $524.9 Mil.
Gross Profit was 26.665 + 29.687 + 30.097 + 25.024 = $111.5 Mil.
Total Current Assets was $378.2 Mil.
Total Assets was $634.7 Mil.
Property, Plant and Equipment(Net PPE) was $204.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.2 Mil.
Selling, General & Admin. Expense(SGA) was $49.5 Mil.
Total Current Liabilities was $110.8 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)
=(128.663 / 542.991) / (141.2 / 524.864)
=0.23695236 / 0.26902207
=0.8808

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)
=(29.499 / 524.864) / (19.971 / 542.991)
=0.21238454 / 0.20139008
=1.0546

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 - (360.689 + 202.505) / 619.266) / (1 - (378.216 + 204.456) / 634.675)
=0.0905459 / 0.08193642
=1.1051

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
=542.991 / 524.864
=1.0345

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))
=(41.221 / (41.221 + 204.456)) / (42.009 / (42.009 + 202.505))
=0.16778534 / 0.17180611
=0.9766

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)
=(53.236 / 542.991) / (49.49 / 524.864)
=0.09804214 / 0.09429109
=1.0398

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 + 91.702) / 619.266) / ((0.027 + 110.802) / 634.675)
=0.14808176 / 0.17462323
=0.848

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
=(21.437 - -7.109 - 40.58) / 619.266
=-0.0194

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 -2.54 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.92081.03030.99531.18471.34531.13791.11261.050.92290.8808
GMI 0.92050.93830.96430.93630.98971.01910.98511.01461.02251.0546
AQI 0.94960.9160.96020.91970.93760.93860.93971.0051.02131.1051
SGI 1.24781.07830.94290.8980.9090.94890.98361.02921.03631.0345
DEPI 1.01490.93690.9590.96780.93121.0131.00171.03251.05280.9766
SGAI 0.81140.84591.01751.05971.02191.16341.10771.03091.08351.0398
LVGI 0.8880.75090.69590.7930.83080.98630.99530.99320.9020.848
TATA 0.02210.04450.0086-0.0067-0.0134-0.0871-0.0821-0.0738-0.0678-0.0194
M-score -2.22-2.14-2.44-2.44-2.29-2.84-2.82-2.74-2.79-2.54
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