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Tesco Corp (NAS:TESO)
Beneish M-Score
-1.91 (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 -1.91 signals that the company is a manipulator.

TESO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.46   Max: -0.81
Current: -1.91

-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 -2.28.


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 * 0.8937+0.528 * 3.5931+0.404 * 1.1293+0.892 * 0.6643+0.115 * 0.9268
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3283+4.679 * -0.103-0.327 * 0.7121
=-1.91

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $75.8 Mil.
Revenue was 61.397 + 74.451 + 91.67 + 134.541 = $362.1 Mil.
Gross Profit was -4.277 + -2.29 + 8.375 + 19.698 = $21.5 Mil.
Total Current Assets was $285.6 Mil.
Total Assets was $515.8 Mil.
Property, Plant and Equipment(Net PPE) was $184.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.7 Mil.
Selling, General & Admin. Expense(SGA) was $45.2 Mil.
Total Current Liabilities was $49.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -19.902 + -27.49 + -8.252 + -2.078 = $-57.7 Mil.
Non Operating Income was -2.069 + -1.258 + -2.95 + -1.719 = $-8.0 Mil.
Cash Flow from Operations was -1.818 + -0.689 + 2.374 + 3.526 = $3.4 Mil.
Accounts Receivable was $127.7 Mil.
Revenue was 141.946 + 145.106 + 121.398 + 136.553 = $545.0 Mil.
Gross Profit was 29.499 + 34.651 + 25.505 + 26.665 = $116.3 Mil.
Total Current Assets was $374.2 Mil.
Total Assets was $627.7 Mil.
Property, Plant and Equipment(Net PPE) was $203.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.1 Mil.
Selling, General & Admin. Expense(SGA) was $51.2 Mil.
Total Current Liabilities was $84.7 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)
=(75.821 / 362.059) / (127.714 / 545.003)
=0.20941614 / 0.23433632
=0.8937

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)
=(-2.29 / 545.003) / (-4.277 / 362.059)
=0.21343002 / 0.05939916
=3.5931

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 - (285.558 + 183.971) / 515.752) / (1 - (374.158 + 203.751) / 627.724)
=0.08962253 / 0.07935813
=1.1293

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
=362.059 / 545.003
=0.6643

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))
=(41.07 / (41.07 + 203.751)) / (40.657 / (40.657 + 183.971))
=0.16775522 / 0.18099703
=0.9268

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)
=(45.196 / 362.059) / (51.219 / 545.003)
=0.12483048 / 0.0939793
=1.3283

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 + 49.577) / 515.752) / ((0.015 + 84.721) / 627.724)
=0.09612566 / 0.13498926
=0.7121

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
=(-57.722 - -7.996 - 3.393) / 515.752
=-0.103

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 -1.91 signals that the company is likely to 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.18471.34531.13791.11261.050.92290.88080.76230.79720.8937
GMI 0.93630.98971.01910.98511.01221.02011.05461.20011.74263.5931
AQI 0.91970.93760.93860.93971.0051.02131.10511.2171.06061.1293
SGI 0.8980.9090.94890.98361.02921.03631.03450.98860.82680.6643
DEPI 0.96780.93121.0131.00171.03251.05280.97660.95330.92530.9268
SGAI 1.05971.02191.16341.10771.03071.08341.03981.00731.11891.3283
LVGI 0.7930.83080.98630.99530.99320.9020.8480.75220.69230.7121
TATA -0.0067-0.0134-0.0871-0.0816-0.0736-0.0676-0.0194-0.0391-0.0803-0.103
M-score -2.44-2.29-2.84-2.82-2.74-2.79-2.54-2.62-2.71-1.91
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