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Trinity Industries Inc (NYSE:TRN)
Beneish M-Score
-2.02 (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 -2.08 signals that the company is a manipulator.

TRN' s 10-Year Beneish M-Score Range
Min: -3.93   Max: -1.73
Current: -2.02

-3.93
-1.73

During the past 13 years, the highest Beneish M-Score of Trinity Industries Inc was -1.73. The lowest was -3.93. 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 * 0.9985+0.528 * 0.9903+0.404 * 1.5302+0.892 * 1.295+0.115 * 0.9558
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.056+4.679 * -0.0112-0.327 * 1.0024
=-2.08

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was 180.2 + 138.2 + 149.4 + 164.2 = $632 Mil.
Non Operating Income was 2.3 + 1.8 + 1 + 1.4 = $7 Mil.
Cash Flow from Operations was 109.4 + 486.6 + 175.2 + -47.9 = $723 Mil.
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.



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)
=(544.9 / 6336.2) / (421.4 / 4892.9)
=0.08599792 / 0.08612479
=0.9985

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)
=(386.1 / 4892.9) / (415.6 / 6336.2)
=0.24682704 / 0.24925034
=0.9903

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 - (2492 + 5148.9) / 8722.4) / (1 - (2345.4 + 4620.6) / 7580.2)
=0.1239911 / 0.08102689
=1.5302

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
=6336.2 / 4892.9
=1.295

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))
=(216.8 / (216.8 + 4620.6)) / (253.3 / (253.3 + 5148.9))
=0.04481746 / 0.0468883
=0.9558

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)
=(418.3 / 6336.2) / (305.9 / 4892.9)
=0.06601749 / 0.06251916
=1.056

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)
=((3485.9 + 911.9) / 8722.4) / ((2940.2 + 872.5) / 7580.2)
=0.50419609 / 0.50298145
=1.0024

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
=(632 - 6.5 - 723.3) / 8722.4
=-0.0112

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 -2.08 signals that the company is likely to 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.77341.04090.98621.16520.73671.64691.14750.81530.83450.8806
GMI 0.90511.08460.94830.93631.10840.84971.13950.96540.83490.951
AQI 1.05890.75330.91370.81990.70620.85591.08970.72480.91111.785
SGI 1.32021.10921.19071.0130.66320.85011.40471.23961.14521.4134
DEPI 1.31651.26320.9611.21230.89151.14040.99911.02331.01560.8934
SGAI 0.88431.03540.92381.04791.15351.17760.79990.86461.13510.9803
LVGI 1.06621.090.94030.98940.9791.20260.99270.97440.89941.0115
TATA -0.03480.0246-0.0163-0.0279-0.1724-0.01550.0068-0.0415-0.0396-0.0167
M-score -2.56-2.29-2.43-2.53-3.92-2.31-1.80-2.73-2.80-2.02

Trinity Industries Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.81530.98741.08221.10760.83450.79420.96680.78160.88060.9985
GMI 0.96540.87470.84120.79080.83490.86280.88360.93480.9510.9903
AQI 0.72481.07131.04521.48740.91111.10531.04171.20531.7851.5302
SGI 1.23961.1381.04981.05641.14521.2811.37721.43041.41341.295
DEPI 1.02331.05441.06871.07391.01560.93250.91730.91920.89340.9558
SGAI 0.86460.98821.09681.11651.13510.99830.94310.97790.98031.056
LVGI 0.97440.9760.92920.94340.89940.89430.9530.97441.01151.0024
TATA -0.0415-0.042-0.0448-0.044-0.0398-0.03210.00680.0035-0.0166-0.0112
M-score -2.73-2.59-2.62-2.44-2.80-2.57-2.17-2.23-2.02-2.08
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