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Trinity Industries Inc (NYSE:TRN)
Beneish M-Score
-2.23 (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 -2.23 suggests that the company is not a manipulator.

TRN' s 10-Year Beneish M-Score Range
Min: -3.91   Max: -1.71
Current: -2.23

-3.91
-1.71

During the past 13 years, the highest Beneish M-Score of Trinity Industries Inc was -1.71. The lowest was -3.91. And the median was -2.54.


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 * 0.7816+0.528 * 0.9348+0.404 * 1.2053+0.892 * 1.4304+0.115 * 0.9192
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9779+4.679 * 0.0034-0.327 * 0.9744
=-2.23

* 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 + 920.7 = $4,030 Mil.
Gross Profit was 274 + 253.9 + 221.8 + 202.7 = $952 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 $201 Mil.
Selling, General & Admin. Expense(SGA) was $267 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 / 4030)
=0.09726607 / 0.12444169
=0.7816

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 / 4030) / (390.6 / 5764.6)
=0.23632754 / 0.25281893
=0.9348

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 / 4030
=1.4304

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))
=(201.1 / (201.1 + 4701.3)) / (226.8 / (226.8 + 4855.3))
=0.04102072 / 0.04462722
=0.9192

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) / (266.8 / 4030)
=0.06473996 / 0.06620347
=0.9779

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 -2.23 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 0.70480.88440.91020.98621.16520.73671.64691.14750.81530.8345
GMI 1.45080.65760.68730.94830.94871.09390.84971.13950.96540.8349
AQI 0.97310.88250.90380.91370.82350.70310.85591.08970.72480.9111
SGI 1.53411.32021.10921.19071.0130.66320.85011.40471.23961.1452
DEPI 0.85531.32151.40730.9611.21230.89151.14040.99911.02331.0156
SGAI 0.68960.88080.95920.92381.04791.15351.17760.79990.86461.1351
LVGI 1.09361.09451.06180.94031.0410.93051.20260.99270.97440.8994
TATA 0.0316-0.03720.0246-0.0163-0.029-0.1724-0.01550.0068-0.0415-0.0396
M-score -1.89-2.68-2.52-2.43-2.55-3.92-2.31-1.80-2.73-2.80

Trinity Industries Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.69720.99270.81530.98741.08221.10760.83450.79420.96680.7816
GMI 1.11831.07310.96540.87470.84120.79080.83490.86280.88360.9348
AQI 0.72550.67740.72481.07131.04521.48740.91111.10531.04171.2053
SGI 1.44271.36071.23961.1381.04981.05641.14521.2811.37721.4304
DEPI 0.97920.97851.02331.05441.06871.07391.01560.93250.91730.9192
SGAI 0.8070.85290.86460.98821.09681.11651.13510.99830.94310.9779
LVGI 0.97360.96890.97440.9760.92920.94340.89940.89430.9530.9744
TATA -0.0158-0.0156-0.0415-0.042-0.0448-0.044-0.0398-0.03210.00680.0034
M-score -2.45-2.30-2.73-2.59-2.62-2.44-2.80-2.57-2.17-2.23
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