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Trinity Industries Inc (NYSE:TRN)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

TRN' s 10-Year Beneish M-Score Range
Min: -3.96   Max: -1.25
Current: -2.57

-3.96
-1.25

During the past 13 years, the highest Beneish M-Score of Trinity Industries Inc was -1.25. The lowest was -3.96. 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 * 0.8002+0.528 * 0.8592+0.404 * 1.1053+0.892 * 1.2713+0.115 * 0.9393
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9926+4.679 * -0.0321-0.327 * 0.8943
=-2.57

* 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 $421 Mil.
Revenue was 1460.5 + 1256 + 1110.3 + 1066.1 = $4,893 Mil.
Gross Profit was 386.5 + 293.3 + 274 + 253.9 = $1,208 Mil.
Total Current Assets was $2,345 Mil.
Total Assets was $7,580 Mil.
Property, Plant and Equipment(Net PPE) was $4,621 Mil.
Depreciation, Depletion and Amortization(DDA) was $217 Mil.
Selling, General & Admin. Expense(SGA) was $306 Mil.
Total Current Liabilities was $873 Mil.
Long-Term Debt was $2,940 Mil.
Net Income was 226.4 + 112.8 + 99.6 + 84 = $523 Mil.
Non Operating Income was 0.4 + 0.5 + 0.5 + -0.9 = $0 Mil.
Cash Flow from Operations was 205.3 + 287.5 + 101.1 + 171.8 = $766 Mil.
Accounts Receivable was $414 Mil.
Revenue was 932.9 + 1012.9 + 907.3 + 995.5 = $3,849 Mil.
Gross Profit was 221.8 + 212 + 179.2 + 203.2 = $816 Mil.
Total Current Assets was $1,769 Mil.
Total Assets was $6,724 Mil.
Property, Plant and Equipment(Net PPE) was $4,462 Mil.
Depreciation, Depletion and Amortization(DDA) was $196 Mil.
Selling, General & Admin. Expense(SGA) was $242 Mil.
Total Current Liabilities was $807 Mil.
Long-Term Debt was $2,975 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)
=(421.4 / 4892.9) / (414.2 / 3848.6)
=0.08612479 / 0.10762355
=0.8002

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)
=(293.3 / 3848.6) / (386.5 / 4892.9)
=0.21207712 / 0.24682704
=0.8592

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 - (2345.4 + 4620.6) / 7580.2) / (1 - (1768.8 + 4462) / 6723.7)
=0.08102689 / 0.07330785
=1.1053

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
=4892.9 / 3848.6
=1.2713

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))
=(196.1 / (196.1 + 4462)) / (216.8 / (216.8 + 4620.6))
=0.04209871 / 0.04481746
=0.9393

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)
=(305.9 / 4892.9) / (242.4 / 3848.6)
=0.06251916 / 0.06298394
=0.9926

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)
=((2940.2 + 872.5) / 7580.2) / ((2974.8 + 806.8) / 6723.7)
=0.50298145 / 0.56242842
=0.8943

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
=(522.8 - 0.5 - 765.7) / 7580.2
=-0.0321

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 -2.57 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.

Trinity Industries Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.70480.77341.04090.98621.16520.73671.86731.05920.7790.8345
GMI 0.62370.90511.08460.94830.93631.10840.81921.15160.99090.8349
AQI 0.97311.05890.75330.91370.81990.70620.85590.73241.00660.9761
SGI 1.53411.32021.10921.19071.0130.66320.74971.52191.29731.1452
DEPI 0.95641.31651.26320.9611.21230.89151.19280.97591.00151.0156
SGAI 0.68540.88431.03540.92381.04791.15351.18670.77070.89041.1351
LVGI 1.09361.06621.090.94030.98940.9791.20260.99190.97510.8994
TATA 0.032-0.03480.0246-0.0163-0.0279-0.1781-0.01670.0058-0.0415-0.0396
M-score -2.32-2.56-2.29-2.43-2.53-3.95-2.21-1.92-2.59-2.77

Trinity Industries Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.05920.77040.65650.94730.7790.93441.0111.02290.83450.8002
GMI 1.15161.171.1051.04990.99090.9030.87720.83130.83490.8592
AQI 0.73240.69790.72550.67741.00661.07131.04521.48740.97611.1053
SGI 1.52191.51611.53221.4261.29731.20261.12381.14391.14521.2713
DEPI 0.97590.97910.97450.98091.00151.01221.01221.00381.01560.9393
SGAI 0.77070.76640.77060.81450.89041.03691.16141.1921.13510.9926
LVGI 0.99190.98070.97360.96890.97510.9760.92920.94340.89940.8943
TATA 0.0058-0.0027-0.0147-0.0114-0.0417-0.0418-0.0446-0.0438-0.0396-0.0321
M-score -1.92-2.23-2.40-2.27-2.59-2.57-2.62-2.44-2.77-2.57
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