Switch to:
GuruFocus has detected 4 Warning Signs with Tesco Corp $TESO.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Tesco Corp (NAS:TESO)
Beneish M-Score
-5.15 (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 -5.15 suggests that the company is not a manipulator.

TESO' s Beneish M-Score Range Over the Past 10 Years
Min: -6.79   Max: -1.42
Current: -5.15

-6.79
-1.42

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -1.42. The lowest was -6.79. And the median was -2.46.


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 * 1.0764+0.528 * 0.188+0.404 * 0.4187+0.892 * 0.4817+0.115 * 0.9041
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.497+4.679 * -0.328-0.327 * 0.9336
=-5.15

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $33.3 Mil.
Revenue was 35.283 + 30.415 + 33.586 + 35.453 = $134.7 Mil.
Gross Profit was -7.91 + -13.913 + -10.078 + -11.406 = $-43.3 Mil.
Total Current Assets was $221.0 Mil.
Total Assets was $344.3 Mil.
Property, Plant and Equipment(Net PPE) was $120.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.3 Mil.
Selling, General & Admin. Expense(SGA) was $30.2 Mil.
Total Current Liabilities was $32.7 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -20.149 + -22.069 + -18.871 + -56.839 = $-117.9 Mil.
Non Operating Income was -1.139 + -0.585 + -0.034 + -1.178 = $-2.9 Mil.
Cash Flow from Operations was 3.472 + -4.263 + -3.398 + 2.116 = $-2.1 Mil.
Accounts Receivable was $64.3 Mil.
Revenue was 52.22 + 61.397 + 74.451 + 91.67 = $279.7 Mil.
Gross Profit was -18.709 + -4.277 + -2.29 + 8.375 = $-16.9 Mil.
Total Current Assets was $236.5 Mil.
Total Assets was $421.7 Mil.
Property, Plant and Equipment(Net PPE) was $177.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $38.1 Mil.
Selling, General & Admin. Expense(SGA) was $41.9 Mil.
Total Current Liabilities was $42.9 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)
=(33.32 / 134.737) / (64.27 / 279.738)
=0.24729659 / 0.2297507
=1.0764

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)
=(-16.901 / 279.738) / (-43.307 / 134.737)
=-0.06041725 / -0.32141876
=0.188

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 - (220.975 + 120.743) / 344.279) / (1 - (236.486 + 177.716) / 421.694)
=0.00743873 / 0.01776644
=0.4187

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
=134.737 / 279.738
=0.4817

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))
=(38.135 / (38.135 + 177.716)) / (29.327 / (29.327 + 120.743))
=0.1766728 / 0.19542214
=0.9041

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)
=(30.212 / 134.737) / (41.901 / 279.738)
=0.22422942 / 0.14978659
=1.497

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 + 32.71) / 344.279) / ((0 + 42.913) / 421.694)
=0.09501015 / 0.10176336
=0.9336

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
=(-117.928 - -2.936 - -2.073) / 344.279
=-0.328

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 -5.15 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 local exchange's currency.

Tesco Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.91260.96110.82771.27421.19081.03021.1380.88080.96961.0764
GMI 1.17960.89612.45070.54510.92990.93741.021.0546-3.33330.188
AQI 1.02490.83011.15620.94040.93770.9160.93861.10510.19620.4187
SGI 1.19731.15690.66711.06111.35471.07830.94891.03450.51520.4817
DEPI 1.0591.01340.82161.01241.03690.93651.01340.97660.97250.9041
SGAI 1.01740.96391.33611.01530.770.84081.17051.03981.52781.497
LVGI 1.03810.82530.54871.04831.46550.75090.98630.8480.68720.9336
TATA 0.0208-0.0544-0.1499-0.10310.01830.0569-0.0871-0.0194-0.2666-0.328
M-score -2.19-2.69-2.74-2.94-2.07-2.08-2.84-2.54-6.79-5.15

Tesco Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.9230.88080.76230.79720.89370.96961.08341.08661.22411.0764
GMI 1.02111.05461.20011.74263.5931-3.3333-1.0949-0.513-0.16650.188
AQI 1.02131.10511.2171.06061.12930.19620.16960.15310.140.4187
SGI 1.03621.03450.98860.82680.66430.51520.43550.41270.41890.4817
DEPI 1.05320.97660.95330.92530.92680.97250.84340.8780.90230.9041
SGAI 1.08981.03981.00731.11891.32831.52781.68371.84141.72681.497
LVGI 0.9020.8480.75220.69230.71210.68720.8310.73140.89950.9336
TATA -0.0676-0.0194-0.0391-0.0803-0.103-0.2666-0.4508-0.4013-0.4243-0.328
M-score -2.79-2.54-2.62-2.71-1.91-6.79-6.54-6.01-5.84-5.15
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK