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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-3.14 (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.

TRC Companies Inc has a M-score of -3.14 suggests that the company is not a manipulator.

TRR' s Beneish M-Score Range Over the Past 10 Years
Min: -200.48   Max: 4.28
Current: -3.14

-200.48
4.28

During the past 13 years, the highest Beneish M-Score of TRC Companies Inc was 4.28. The lowest was -200.48. And the median was -2.71.


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 TRC Companies 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 * 0.6069+0.528 * 1.0112+0.404 * 1.4442+0.892 * 1.1398+0.115 * 1.1761
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.027+4.679 * -0.106-0.327 * 1.3994
=-3.14

* 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 $92.6 Mil.
Revenue was 121.426 + 112.44 + 100.92 + 114.892 = $449.7 Mil.
Gross Profit was 17.396 + 18.764 + 17.936 + 24.876 = $79.0 Mil.
Total Current Assets was $243.9 Mil.
Total Assets was $462.3 Mil.
Property, Plant and Equipment(Net PPE) was $22.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.4 Mil.
Selling, General & Admin. Expense(SGA) was $37.2 Mil.
Total Current Liabilities was $170.4 Mil.
Long-Term Debt was $83.8 Mil.
Net Income was -14.297 + 3.937 + 4.492 + 6.763 = $0.9 Mil.
Non Operating Income was -0.027 + -0.027 + -0.015 + -0.03 = $-0.1 Mil.
Cash Flow from Operations was 17.039 + -0.952 + 14.388 + 19.535 = $50.0 Mil.
Accounts Receivable was $133.9 Mil.
Revenue was 101.77 + 100.501 + 97.485 + 94.779 = $394.5 Mil.
Gross Profit was 18.284 + 17.902 + 16.295 + 17.585 = $70.1 Mil.
Total Current Assets was $229.7 Mil.
Total Assets was $343.7 Mil.
Property, Plant and Equipment(Net PPE) was $13.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.3 Mil.
Selling, General & Admin. Expense(SGA) was $31.8 Mil.
Total Current Liabilities was $135.0 Mil.
Long-Term Debt was $0.1 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)
=(92.644 / 449.678) / (133.932 / 394.535)
=0.20602298 / 0.33946798
=0.6069

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)
=(70.066 / 394.535) / (78.972 / 449.678)
=0.17759134 / 0.175619
=1.0112

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 - (243.852 + 22.758) / 462.259) / (1 - (229.726 + 13.218) / 343.654)
=0.42324541 / 0.29305639
=1.4442

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
=449.678 / 394.535
=1.1398

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))
=(9.327 / (9.327 + 13.218)) / (12.35 / (12.35 + 22.758))
=0.41370592 / 0.35177168
=1.1761

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)
=(37.19 / 449.678) / (31.771 / 394.535)
=0.08270362 / 0.08052771
=1.027

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)
=((83.756 + 170.449) / 462.259) / ((0.06 + 134.984) / 343.654)
=0.54991898 / 0.39296502
=1.3994

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
=(0.895 - -0.099 - 50.01) / 462.259
=-0.106

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.

TRC Companies Inc has a M-score of -3.14 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.

TRC Companies Inc Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 0.82991.04160.89180.78110.70831.42360.42832.15260.93281.0639
GMI -0.13940.44220.98180.55841.66040.61530.93521.06611.06820.8736
AQI 1.031.0010.86070.88520.91261.01230.97080.90390.85720.9003
SGI 1.06381.05581.04811.02981.2310.71981.23671.07421.14681.112
DEPI 0.95171.03630.91350.93620.80551.40791.00850.860.82650.9954
SGAI 2.09440.73311.65210.73050.66911.34610.95440.92230.88091.071
LVGI 0.94421.07421.37960.97550.96661.10470.83270.91730.97161.0068
TATA -0.0606-0.0132-0.2742-0.1276-0.0995-0.07790.05250.0718-0.0277-0.0347
M-score -3.63-2.72-4.13-3.48-2.65-2.95-2.53-1.00-2.55-2.61

TRC Companies Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.00810.98850.93280.63481.07531.00571.06390.9641.00890.6069
GMI 1.0191.04511.06821.04231.03050.940.87360.8690.90441.0112
AQI 0.88670.85210.85720.91420.9560.9330.90030.8221.4281.4442
SGI 1.15981.15731.14681.10251.08151.07851.1121.10971.11431.1398
DEPI 0.81710.81630.82650.84380.92570.94260.99541.23261.37361.1761
SGAI 0.99821.00780.88090.85050.8450.8561.0711.0981.05241.027
LVGI 0.94090.91070.97160.95370.99470.98451.00681.02981.41611.3994
TATA 0.06270.0536-0.0274-0.028-0.0408-0.0378-0.0347-0.0622-0.0485-0.106
M-score -2.07-2.13-2.55-2.85-2.51-2.62-2.61-2.85-2.58-3.14
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