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Tesco Corp (NAS:TESO)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

TESO' s 10-Year Beneish M-Score Range
Min: -3.48   Max: -0.81
Current: -2.79

-3.48
-0.81

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -0.81. The lowest was -3.48. And the median was -2.26.


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 * 0.9223+0.528 * 1.0165+0.404 * 1.0213+0.892 * 1.037+0.115 * 1.0624
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0828+4.679 * -0.0666-0.327 * 0.902
=-2.79

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $127.7 Mil.
Revenue was 141.946 + 145.106 + 121.398 + 136.941 = $545.4 Mil.
Gross Profit was 29.499 + 34.378 + 25.505 + 27.441 = $116.8 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 $40.6 Mil.
Selling, General & Admin. Expense(SGA) was $51.2 Mil.
Total Current Liabilities was $84.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 7.486 + 12.74 + 3.018 + 5.513 = $28.8 Mil.
Non Operating Income was -3.174 + 0.975 + -3.345 + -2.474 = $-8.0 Mil.
Cash Flow from Operations was 16.908 + 16.822 + 3.324 + 41.511 = $78.6 Mil.
Accounts Receivable was $133.5 Mil.
Revenue was 132.248 + 128.968 + 127.095 + 137.626 = $525.9 Mil.
Gross Profit was 29.687 + 30.097 + 25.024 + 29.704 = $114.5 Mil.
Total Current Assets was $356.0 Mil.
Total Assets was $604.7 Mil.
Property, Plant and Equipment(Net PPE) was $201.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.3 Mil.
Selling, General & Admin. Expense(SGA) was $45.6 Mil.
Total Current Liabilities was $90.5 Mil.
Long-Term Debt was $0.1 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)
=(127.714 / 545.391) / (133.536 / 525.937)
=0.23416961 / 0.25390113
=0.9223

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)
=(34.378 / 525.937) / (29.499 / 545.391)
=0.2177295 / 0.21420045
=1.0165

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 - (374.158 + 203.751) / 627.724) / (1 - (356.02 + 201.721) / 604.728)
=0.07935813 / 0.0776994
=1.0213

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
=545.391 / 525.937
=1.037

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))
=(43.269 / (43.269 + 201.721)) / (40.627 / (40.627 + 203.751))
=0.17661537 / 0.16624655
=1.0624

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)
=(51.227 / 545.391) / (45.624 / 525.937)
=0.09392711 / 0.08674803
=1.0828

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)
=((0.015 + 84.721) / 627.724) / ((0.051 + 90.451) / 604.728)
=0.13498926 / 0.14965737
=0.902

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
=(28.757 - -8.018 - 78.565) / 627.724
=-0.0666

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 -2.79 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.09751.12260.75070.91260.96110.82861.27281.19081.03031.1482
GMI 1.7670.95870.75581.17960.89612.47310.54020.92990.93821.0128
AQI 1.12720.96020.66831.02490.83011.15620.94040.93770.91080.9274
SGI 0.95591.47351.90221.19731.15690.66641.06221.35471.07830.9496
DEPI 0.95830.89010.92431.0591.01340.82161.01241.03270.94061.0241
SGAI 0.76640.96380.67451.01740.96391.33751.01420.770.84591.1626
LVGI 0.56771.77621.07921.03810.82530.54871.04831.46550.77070.9579
TATA -0.0538-0.04440.07980.0208-0.0544-0.1507-0.10360.01830.0568-0.0855
M-score -2.05-2.45-1.77-2.19-2.69-2.73-2.94-2.07-2.09-2.82

Tesco Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.90340.92161.03030.99531.18471.34531.14821.11171.04930.9223
GMI 0.97850.93040.94450.96430.93630.98971.01280.97911.00861.0165
AQI 0.95240.94960.91080.96020.91970.93760.92740.93971.0051.0213
SGI 1.34641.24681.07830.94290.8980.9090.94960.98441.031.037
DEPI 1.00351.01110.94060.96270.97140.93471.02411.01081.04191.0624
SGAI 0.77410.81210.84591.01751.05971.02191.16261.10681.03011.0828
LVGI 1.01990.8880.77070.69590.7930.83080.95790.99530.99320.902
TATA 0.04490.0350.05680.0211-0.009-0.0156-0.0876-0.083-0.0726-0.0666
M-score -2.05-2.16-2.09-2.38-2.46-2.30-2.83-2.83-2.74-2.79
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