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Tesco Corp (NAS:TESO)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

TESO' s 10-Year Beneish M-Score Range
Min: -3.48   Max: -0.88
Current: -2.73

-3.48
-0.88

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -0.88. The lowest was -3.48. And the median was -2.23.


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 * 1.0632+0.528 * 1.0086+0.404 * 1.005+0.892 * 1.03+0.115 * 1.0419
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0301+4.679 * -0.0726-0.327 * 0.9932
=-2.73

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $142.0 Mil.
Revenue was 145.106 + 121.398 + 136.941 + 132.248 = $535.7 Mil.
Gross Profit was 34.378 + 25.505 + 27.441 + 29.687 = $117.0 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 $40.6 Mil.
Selling, General & Admin. Expense(SGA) was $50.3 Mil.
Total Current Liabilities was $96.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 12.74 + 3.018 + 5.513 + 11.68 = $33.0 Mil.
Non Operating Income was 0.975 + -3.345 + -2.474 + -0.542 = $-5.4 Mil.
Cash Flow from Operations was 16.822 + 3.324 + 41.511 + 23.583 = $85.2 Mil.
Accounts Receivable was $129.7 Mil.
Revenue was 128.968 + 127.095 + 137.626 + 126.419 = $520.1 Mil.
Gross Profit was 30.097 + 25.024 + 29.704 + 29.758 = $114.6 Mil.
Total Current Assets was $336.3 Mil.
Total Assets was $588.8 Mil.
Property, Plant and Equipment(Net PPE) was $204.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.6 Mil.
Selling, General & Admin. Expense(SGA) was $47.4 Mil.
Total Current Liabilities was $88.6 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)
=(142.039 / 535.693) / (129.708 / 520.108)
=0.26515 / 0.24938667
=1.0632

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)
=(25.505 / 520.108) / (34.378 / 535.693)
=0.22030617 / 0.21842921
=1.0086

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 - (388.493 + 205.098) / 646.126) / (1 - (336.339 + 204.81) / 588.786)
=0.08130767 / 0.08090715
=1.005

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
=535.693 / 520.108
=1.03

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))
=(42.633 / (42.633 + 204.81)) / (40.638 / (40.638 + 205.098))
=0.17229423 / 0.16537259
=1.0419

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)
=(50.267 / 535.693) / (47.377 / 520.108)
=0.09383546 / 0.0910907
=1.0301

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 + 96.621) / 646.126) / ((0.079 + 88.571) / 588.786)
=0.14953894 / 0.15056404
=0.9932

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
=(32.951 - -5.386 - 85.24) / 646.126
=-0.0726

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 -2.73 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 1.20671.05020.72980.91260.96110.82861.31371.18331.0371.1696
GMI 1.7670.95870.75581.17960.89612.47310.54020.92990.93821.0128
AQI 1.12720.96020.66831.02490.83011.15620.94040.93770.9160.9221
SGI 0.95591.47351.90221.19731.15690.66641.06221.35471.07830.9496
DEPI 0.95830.89010.92431.0591.01340.82161.01241.03690.93691.0241
SGAI 0.76640.96380.67451.01740.96391.33751.01420.770.84591.1626
LVGI 0.56771.77621.07921.03810.82530.54871.04831.46550.75090.9832
TATA -0.0538-0.04440.07980.0208-0.0544-0.1507-0.10360.01830.0571-0.0855
M-score -1.95-2.52-1.79-2.19-2.69-2.73-2.90-2.08-2.07-2.81

Tesco Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.08440.8970.91141.0371.01721.20451.40771.16961.1361.0632
GMI 0.95970.97070.92350.93830.96430.93630.98971.01280.97911.0086
AQI 0.88720.95240.94960.9160.96020.91970.93760.92210.93971.005
SGI 1.40531.34641.24681.07830.94290.8980.9090.94960.98441.03
DEPI 1.04251.00731.01490.93690.9590.96780.93121.02411.01081.0419
SGAI 0.71770.77410.81210.84591.01751.05971.02191.16261.10681.0301
LVGI 1.45241.01990.8880.75090.69590.7930.83080.98320.99530.9932
TATA 0.03620.03180.02210.04450.0086-0.0067-0.0134-0.0855-0.0809-0.0726
M-score -2.03-2.12-2.23-2.13-2.42-2.43-2.24-2.81-2.80-2.73
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