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Tesco Corp (NAS:TESO)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

TESO' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -0.88
Current: -2.81

-3.46
-0.88

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -0.88. The lowest was -3.46. 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 * 1.136+0.528 * 0.9791+0.404 * 0.9397+0.892 * 0.9844+0.115 * 1.0108
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1068+4.679 * -0.083-0.327 * 0.9953
=-2.81

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $145.7 Mil.
Revenue was 121.398 + 136.941 + 132.248 + 128.968 = $519.6 Mil.
Gross Profit was 25.505 + 27.441 + 29.687 + 30.097 = $112.7 Mil.
Total Current Assets was $387.4 Mil.
Total Assets was $641.5 Mil.
Property, Plant and Equipment(Net PPE) was $202.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.5 Mil.
Selling, General & Admin. Expense(SGA) was $50.7 Mil.
Total Current Liabilities was $106.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 3.018 + 5.513 + 11.68 + 10.229 = $30.4 Mil.
Non Operating Income was -3.345 + -2.474 + -0.542 + 0.671 = $-5.7 Mil.
Cash Flow from Operations was 3.324 + 41.511 + 23.583 + 20.944 = $89.4 Mil.
Accounts Receivable was $130.3 Mil.
Revenue was 127.095 + 137.626 + 126.419 + 136.673 = $527.8 Mil.
Gross Profit was 25.024 + 29.704 + 29.758 + 27.639 = $112.1 Mil.
Total Current Assets was $329.9 Mil.
Total Assets was $588.9 Mil.
Property, Plant and Equipment(Net PPE) was $208.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.2 Mil.
Selling, General & Admin. Expense(SGA) was $46.5 Mil.
Total Current Liabilities was $98.3 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)
=(145.744 / 519.555) / (130.339 / 527.813)
=0.28051698 / 0.24694163
=1.136

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)
=(27.441 / 527.813) / (25.505 / 519.555)
=0.21243319 / 0.21697414
=0.9791

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 - (387.418 + 202.406) / 641.467) / (1 - (329.894 + 208.58) / 588.927)
=0.08050765 / 0.08566936
=0.9397

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
=519.555 / 527.813
=0.9844

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))
=(42.238 / (42.238 + 208.58)) / (40.461 / (40.461 + 202.406))
=0.16840099 / 0.16659736
=1.0108

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)
=(50.677 / 519.555) / (46.513 / 527.813)
=0.09753924 / 0.08812401
=1.1068

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)
=((0.007 + 106.685) / 641.467) / ((0.103 + 98.317) / 588.927)
=0.166325 / 0.16711749
=0.9953

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
=(30.44 - -5.69 - 89.362) / 641.467
=-0.083

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 -2.81 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 1.20671.05020.72980.91260.96110.99561.09331.18331.0371.1696
GMI 1.7670.95870.75581.17960.89612.45070.54510.92990.93821.0128
AQI 1.12720.96020.66831.02490.83011.15620.94040.93770.9160.9221
SGI 0.95591.47351.90221.19731.15690.66711.06111.35471.07830.9496
DEPI 0.95830.89010.92431.0591.01340.82161.01241.03690.93691.0241
SGAI 0.76640.96380.67451.01740.96391.33611.01530.770.84591.1626
LVGI 0.56771.77621.07921.03810.82530.54871.04831.46550.75090.9832
TATA -0.0538-0.04440.07980.0208-0.0544-0.1499-0.10310.01830.0571-0.0855
M-score -1.95-2.52-1.79-2.19-2.69-2.58-3.10-2.08-2.07-2.81

Tesco Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.18411.08480.8970.91061.0371.01721.20451.40771.16961.136
GMI 0.93260.9610.97070.92050.93830.96430.93630.98971.01280.9791
AQI 0.93770.88720.95240.94960.9160.96020.91970.93760.92210.9397
SGI 1.35381.40491.34641.24781.07830.94290.8980.9090.94960.9844
DEPI 1.03691.04251.00731.01490.93690.9590.96780.93121.02411.0108
SGAI 0.77050.71790.77410.81140.84591.01751.05971.02191.16261.1068
LVGI 1.46551.45241.01990.8880.75090.69590.7930.83080.98320.9953
TATA 0.01830.03620.03180.02210.04450.0086-0.009-0.0156-0.0876-0.083
M-score -2.08-2.03-2.12-2.23-2.13-2.42-2.44-2.25-2.82-2.81
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