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Trinity Industries Inc (NYSE:TRN)
Beneish M-Score
-2.95 (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.

Trinity Industries Inc has a M-score of -2.95 suggests that the company is not a manipulator.

TRN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.95   Max: -1.3
Current: -2.95

-3.95
-1.3

During the past 13 years, the highest Beneish M-Score of Trinity Industries Inc was -1.30. The lowest was -3.95. And the median was -2.53.


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 Trinity Industries Inc 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 * 1.0875+0.528 * 1.0058+0.404 * 0.9377+0.892 * 0.7732+0.115 * 1.0515
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2723+4.679 * -0.0692-0.327 * 0.8844
=-2.95

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $427 Mil.
Revenue was 1111.7 + 1184.9 + 1187.9 + 1547 = $5,032 Mil.
Gross Profit was 284.4 + 287.2 + 298 + 430.9 = $1,301 Mil.
Total Current Assets was $2,323 Mil.
Total Assets was $9,136 Mil.
Property, Plant and Equipment(Net PPE) was $5,763 Mil.
Depreciation, Depletion and Amortization(DDA) was $279 Mil.
Selling, General & Admin. Expense(SGA) was $443 Mil.
Total Current Liabilities was $689 Mil.
Long-Term Debt was $3,107 Mil.
Net Income was 84.2 + 94.6 + 97.2 + 200 = $476 Mil.
Non Operating Income was -0.2 + 4.9 + 0.7 + 1.6 = $7 Mil.
Cash Flow from Operations was 305.7 + 200.3 + 286.1 + 309.4 = $1,102 Mil.
Accounts Receivable was $508 Mil.
Revenue was 1542.2 + 1676.8 + 1626.7 + 1661.4 = $6,507 Mil.
Gross Profit was 432.8 + 457.2 + 415.6 + 386.1 = $1,692 Mil.
Total Current Assets was $2,418 Mil.
Total Assets was $8,805 Mil.
Property, Plant and Equipment(Net PPE) was $5,308 Mil.
Depreciation, Depletion and Amortization(DDA) was $271 Mil.
Selling, General & Admin. Expense(SGA) was $450 Mil.
Total Current Liabilities was $852 Mil.
Long-Term Debt was $3,285 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)
=(427.1 / 5031.5) / (507.9 / 6507.1)
=0.08488522 / 0.0780532
=1.0875

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)
=(1691.7 / 6507.1) / (1300.5 / 5031.5)
=0.25997756 / 0.25847163
=1.0058

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 - (2323.1 + 5763.2) / 9135.6) / (1 - (2418.4 + 5308.4) / 8805.3)
=0.11485836 / 0.12248305
=0.9377

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
=5031.5 / 6507.1
=0.7732

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))
=(271 / (271 + 5308.4)) / (279.1 / (279.1 + 5763.2))
=0.04857153 / 0.04619102
=1.0515

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)
=(442.6 / 5031.5) / (449.9 / 6507.1)
=0.08796582 / 0.06913986
=1.2723

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)
=((3107.1 + 688.7) / 9135.6) / ((3284.5 + 852.1) / 8805.3)
=0.41549542 / 0.46978524
=0.8844

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
=(476 - 7 - 1101.5) / 9135.6
=-0.0692

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.

Trinity Industries Inc has a M-score of -2.95 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.

Trinity Industries Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.04090.98621.16520.73671.86731.05920.7790.83450.88060.967
GMI 1.08460.94830.93631.10840.81921.15160.99090.83490.9510.9249
AQI 0.75330.91370.81990.70620.85590.73241.00660.97611.73020.9793
SGI 1.10921.19071.0130.66320.74971.52191.29731.14521.41341.0361
DEPI 1.26320.9611.21230.89151.19280.97591.00151.01560.89341.0014
SGAI 1.03540.92381.04791.15351.18670.77070.89041.13510.98031.1393
LVGI 1.090.94030.98940.9791.20260.99190.97510.89941.00740.8535
TATA 0.0246-0.0163-0.0279-0.1769-0.01670.0058-0.0415-0.0396-0.0167-0.0167
M-score -2.29-2.43-2.53-3.94-2.21-1.92-2.59-2.77-2.04-2.58

Trinity Industries Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.98240.79950.88060.99850.93760.80250.9670.77521.02461.0875
GMI 0.87630.92280.9510.99030.99890.97250.92490.91670.95261.0058
AQI 1.04171.20531.73021.53021.89190.93690.97930.93420.78180.9377
SGI 1.35541.39841.41341.2951.22881.12881.03610.93970.83670.7732
DEPI 0.93020.9380.89340.95580.93040.91881.00140.99971.03131.0515
SGAI 0.93550.9680.98031.0561.07331.0681.13931.20741.27891.2723
LVGI 0.9530.97441.00741.00240.94910.89420.85350.85640.87860.8844
TATA 0.00680.0034-0.0167-0.0112-0.0313-0.0441-0.0167-0.0457-0.0616-0.0692
M-score -2.18-2.24-2.04-2.08-2.12-2.78-2.58-3.01-3.01-2.95
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