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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: -3.93   Max: -1.3
Current: -3.01

-3.93
-1.3

During the past 13 years, the highest Beneish M-Score of Trinity Industries Inc was -1.30. The lowest was -3.93. 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 * 1.0246+0.528 * 0.9526+0.404 * 0.7818+0.892 * 0.8367+0.115 * 1.0313
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2789+4.679 * -0.0616-0.327 * 0.8786
=-3.01

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $508 Mil.
Revenue was 1184.9 + 1187.9 + 1547 + 1542.2 = $5,462 Mil.
Gross Profit was 287.2 + 298 + 430.9 + 432.8 = $1,449 Mil.
Total Current Assets was $2,388 Mil.
Total Assets was $9,035 Mil.
Property, Plant and Equipment(Net PPE) was $5,607 Mil.
Depreciation, Depletion and Amortization(DDA) was $276 Mil.
Selling, General & Admin. Expense(SGA) was $467 Mil.
Total Current Liabilities was $681 Mil.
Long-Term Debt was $3,130 Mil.
Net Income was 94.6 + 97.2 + 200 + 204.3 = $596 Mil.
Non Operating Income was 4.9 + 0.7 + 1.6 + 1 = $8 Mil.
Cash Flow from Operations was 200.3 + 286.1 + 309.4 + 348.3 = $1,144 Mil.
Accounts Receivable was $593 Mil.
Revenue was 1676.8 + 1626.7 + 1661.4 + 1562.8 = $6,528 Mil.
Gross Profit was 457.2 + 415.6 + 386.1 + 390.6 = $1,650 Mil.
Total Current Assets was $2,167 Mil.
Total Assets was $8,632 Mil.
Property, Plant and Equipment(Net PPE) was $5,194 Mil.
Depreciation, Depletion and Amortization(DDA) was $264 Mil.
Selling, General & Admin. Expense(SGA) was $436 Mil.
Total Current Liabilities was $803 Mil.
Long-Term Debt was $3,340 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)
=(508.2 / 5462) / (592.8 / 6527.7)
=0.09304284 / 0.090813
=1.0246

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)
=(1649.5 / 6527.7) / (1448.9 / 5462)
=0.25269237 / 0.26526913
=0.9526

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 - (2388.1 + 5606.6) / 9035.4) / (1 - (2166.5 + 5193.9) / 8632.2)
=0.11518029 / 0.14733208
=0.7818

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
=5462 / 6527.7
=0.8367

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))
=(264 / (264 + 5193.9)) / (275.9 / (275.9 + 5606.6))
=0.04837025 / 0.04690183
=1.0313

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)
=(466.9 / 5462) / (436.3 / 6527.7)
=0.08548151 / 0.06683824
=1.2789

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)
=((3129.6 + 680.5) / 9035.4) / ((3340.3 + 802.9) / 8632.2)
=0.42168581 / 0.47997034
=0.8786

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
=(596.1 - 8.2 - 1144.1) / 9035.4
=-0.0616

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 1.08460.94830.93631.10840.84971.13950.96540.83490.9510.9249
AQI 0.75330.91370.81990.70620.85591.08970.72480.91111.7850.9492
SGI 1.10921.19071.0130.66320.85011.40471.23961.14521.41341.0361
DEPI 1.26320.9611.21230.89151.14040.99911.02331.01560.89341.0014
SGAI 1.03540.92381.04791.15351.17760.79990.86461.13510.98031.1393
LVGI 1.090.94030.98940.9791.20260.99270.97440.89941.01150.85
TATA 0.0246-0.0163-0.0279-0.1724-0.01550.0068-0.0415-0.0396-0.0167-0.0167
M-score -2.29-2.43-2.53-3.92-2.31-1.80-2.73-2.80-2.02-2.59

Trinity Industries Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.79420.96680.78160.88060.99850.93760.80250.9670.77521.0246
GMI 0.86280.88360.93480.9510.99030.99890.97250.92490.91670.9526
AQI 1.10531.04171.20531.7851.53021.89190.93690.94920.93420.7818
SGI 1.2811.37721.43041.41341.2951.22881.12881.03610.93970.8367
DEPI 0.93250.91730.91920.89340.95580.93040.91881.00140.99971.0313
SGAI 0.99830.94310.97790.98031.0561.07331.0681.13931.20741.2789
LVGI 0.89430.9530.97441.01151.00240.94910.89420.850.85640.8786
TATA -0.03210.00680.0034-0.0167-0.0112-0.0313-0.0441-0.0167-0.0457-0.0616
M-score -2.57-2.17-2.23-2.02-2.08-2.12-2.78-2.59-3.01-3.01
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