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Trinity Industries Inc (NYSE:TRN)
Beneish M-Score
-2.24 (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 -2.24 suggests that the company is not a manipulator.

TRN' s 10-Year Beneish M-Score Range
Min: -3.96   Max: -1.3
Current: -2.24

-3.96
-1.3

During the past 13 years, the highest Beneish M-Score of Trinity Industries Inc was -1.30. The lowest was -3.96. And the median was -2.52.


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 * 0.7995+0.528 * 0.9228+0.404 * 1.2053+0.892 * 1.3984+0.115 * 0.938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.968+4.679 * 0.0034-0.327 * 0.9744
=-2.24

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $561 Mil.
Revenue was 1562.8 + 1485.3 + 1460.5 + 1256 = $5,765 Mil.
Gross Profit was 390.6 + 387 + 386.5 + 293.3 = $1,457 Mil.
Total Current Assets was $2,573 Mil.
Total Assets was $8,545 Mil.
Property, Plant and Equipment(Net PPE) was $4,855 Mil.
Depreciation, Depletion and Amortization(DDA) was $227 Mil.
Selling, General & Admin. Expense(SGA) was $373 Mil.
Total Current Liabilities was $894 Mil.
Long-Term Debt was $3,596 Mil.
Net Income was 149.4 + 164.2 + 226.4 + 112.8 = $653 Mil.
Non Operating Income was 1 + 1.4 + 0.4 + 0.5 = $3 Mil.
Cash Flow from Operations was 175.2 + -47.9 + 205.3 + 287.5 = $620 Mil.
Accounts Receivable was $502 Mil.
Revenue was 1110.3 + 1066.1 + 932.9 + 1012.9 = $4,122 Mil.
Gross Profit was 274 + 253.9 + 221.8 + 212 = $962 Mil.
Total Current Assets was $1,770 Mil.
Total Assets was $7,258 Mil.
Property, Plant and Equipment(Net PPE) was $4,701 Mil.
Depreciation, Depletion and Amortization(DDA) was $205 Mil.
Selling, General & Admin. Expense(SGA) was $276 Mil.
Total Current Liabilities was $893 Mil.
Long-Term Debt was $3,021 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)
=(560.7 / 5764.6) / (501.5 / 4122.2)
=0.09726607 / 0.12165834
=0.7995

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)
=(387 / 4122.2) / (390.6 / 5764.6)
=0.23329775 / 0.25281893
=0.9228

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 - (2572.5 + 4855.3) / 8544.9) / (1 - (1769.7 + 4701.3) / 7258.3)
=0.13073295 / 0.10846893
=1.2053

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
=5764.6 / 4122.2
=1.3984

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))
=(205.4 / (205.4 + 4701.3)) / (226.8 / (226.8 + 4855.3))
=0.04186113 / 0.04462722
=0.938

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)
=(373.2 / 5764.6) / (275.7 / 4122.2)
=0.06473996 / 0.06688176
=0.968

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)
=((3595.6 + 893.8) / 8544.9) / ((3021.1 + 892.7) / 7258.3)
=0.52538941 / 0.53921717
=0.9744

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
=(652.8 - 3.3 - 620.1) / 8544.9
=0.0034

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 -2.24 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.65650.94730.7790.93441.0111.02290.83450.80020.98240.7995
GMI 1.1051.04990.99090.9030.87720.83130.83490.85920.87630.9228
AQI 0.72550.67741.00661.07131.04521.48740.97611.10531.04171.2053
SGI 1.53221.4261.29731.20261.12381.14391.14521.27131.35541.3984
DEPI 0.97450.98091.00151.01221.01221.00381.01560.93930.93020.938
SGAI 0.77060.81450.89041.03691.16141.1921.13510.99260.93550.968
LVGI 0.97360.96890.97510.9760.92920.94340.89940.89430.9530.9744
TATA -0.0147-0.0114-0.0417-0.0418-0.0446-0.0438-0.0396-0.03210.00680.0034
M-score -2.40-2.27-2.59-2.57-2.62-2.44-2.77-2.57-2.18-2.24
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