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Trinity Industries Inc (NYSE:TRN)
Beneish M-Score
-3.01 (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 -3.01 suggests that the company is not a manipulator.

TRN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.96   Max: -1.3
Current: -3.01

-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 * 0.7752+0.528 * 0.9167+0.404 * 0.9342+0.892 * 0.9397+0.115 * 0.9997
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2074+4.679 * -0.0457-0.327 * 0.8564
=-3.01

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $397 Mil.
Revenue was 1187.9 + 1547 + 1542.2 + 1676.8 = $5,954 Mil.
Gross Profit was 298 + 430.9 + 432.8 + 457.2 = $1,619 Mil.
Total Current Assets was $2,354 Mil.
Total Assets was $8,910 Mil.
Property, Plant and Equipment(Net PPE) was $5,524 Mil.
Depreciation, Depletion and Amortization(DDA) was $272 Mil.
Selling, General & Admin. Expense(SGA) was $475 Mil.
Total Current Liabilities was $676 Mil.
Long-Term Debt was $3,171 Mil.
Net Income was 97.2 + 200 + 204.3 + 212 = $714 Mil.
Non Operating Income was 0.7 + 1.6 + 1 + 0.7 = $4 Mil.
Cash Flow from Operations was 286.1 + 309.4 + 348.3 + 172.6 = $1,116 Mil.
Accounts Receivable was $545 Mil.
Revenue was 1626.7 + 1661.4 + 1562.8 + 1485.3 = $6,336 Mil.
Gross Profit was 415.6 + 386.1 + 390.6 + 387 = $1,579 Mil.
Total Current Assets was $2,492 Mil.
Total Assets was $8,722 Mil.
Property, Plant and Equipment(Net PPE) was $5,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $253 Mil.
Selling, General & Admin. Expense(SGA) was $418 Mil.
Total Current Liabilities was $912 Mil.
Long-Term Debt was $3,486 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)
=(396.9 / 5953.9) / (544.9 / 6336.2)
=0.06666219 / 0.08599792
=0.7752

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)
=(430.9 / 6336.2) / (298 / 5953.9)
=0.24925034 / 0.27190581
=0.9167

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 - (2354.2 + 5523.5) / 8909.7) / (1 - (2492 + 5148.9) / 8722.4)
=0.11582882 / 0.1239911
=0.9342

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
=5953.9 / 6336.2
=0.9397

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))
=(253.3 / (253.3 + 5148.9)) / (271.8 / (271.8 + 5523.5))
=0.0468883 / 0.04690007
=0.9997

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)
=(474.6 / 5953.9) / (418.3 / 6336.2)
=0.07971246 / 0.06601749
=1.2074

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)
=((3171 + 676.1) / 8909.7) / ((3485.9 + 911.9) / 8722.4)
=0.43178783 / 0.50419609
=0.8564

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
=(713.5 - 4 - 1116.4) / 8909.7
=-0.0457

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 -3.01 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.04090.98621.16520.73671.64691.14750.81530.83450.88060.967
GMI 0.68730.94830.94871.09390.84971.13950.96540.83490.9510.9249
AQI 0.75330.91370.81990.70620.85590.73241.00660.97611.73020.9793
SGI 1.10921.19071.0130.66320.85011.40471.23961.14521.41341.0361
DEPI 1.45780.9611.21230.89151.14040.99441.02811.01560.89341.0014
SGAI 0.95920.92381.04791.15351.17760.79990.86461.13510.98031.1393
LVGI 1.090.94030.98940.9791.20260.99190.97510.89941.00740.8535
TATA 0.0246-0.0163-0.029-0.1724-0.01550.0068-0.0415-0.0396-0.0167-0.0167
M-score -2.46-2.43-2.53-3.93-2.31-1.95-2.61-2.77-2.04-2.58

Trinity Industries Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.83450.80020.98240.79950.88060.99850.93760.80250.9670.7752
GMI 0.83490.85920.87630.92280.9510.99030.99890.97250.92490.9167
AQI 0.97611.10531.04171.20531.73021.53021.89190.93690.97930.9342
SGI 1.14521.27131.35541.39841.41341.2951.22881.12881.03610.9397
DEPI 1.01560.93930.93020.9380.89340.95580.93040.91881.00140.9997
SGAI 1.13510.99260.93550.9680.98031.0561.07331.0681.13931.2074
LVGI 0.89940.89430.9530.97441.00741.00240.94910.89420.85350.8564
TATA -0.0396-0.03210.00680.0034-0.0167-0.0112-0.0313-0.0441-0.0167-0.0457
M-score -2.77-2.57-2.18-2.24-2.04-2.08-2.12-2.78-2.58-3.01
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