Switch to:
TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.34 (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 -2.34 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: -2.34

-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 * 0.9943 + 0.528 * 1.1596 + 0.404 * 1.703 + 0.892 * 1.2087 + 0.115 * 0.7779 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 0.8655 + 4.679 * -0.0647 - 0.327 * 1.3077 = -2.34

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

 This Year (Sep16) TTM: Last Year (Sep15) TTM: Accounts Receivable was \$101.4 Mil. Revenue was 124.976 + 146.513 + 121.426 + 112.44 = \$505.4 Mil. Gross Profit was 21.3 + 24.886 + 17.396 + 18.764 = \$82.3 Mil. Total Current Assets was \$258.7 Mil. Total Assets was \$483.0 Mil. Property, Plant and Equipment(Net PPE) was \$22.3 Mil. Depreciation, Depletion and Amortization(DDA) was \$17.0 Mil. Selling, General & Admin. Expense(SGA) was \$38.1 Mil. Total Current Liabilities was \$183.4 Mil. Long-Term Debt was \$77.3 Mil. Net Income was 3.639 + 5.909 + -14.297 + 3.937 = \$-0.8 Mil. Non Operating Income was -0.034 + -0.053 + -0.027 + -0.027 = \$-0.1 Mil. Cash Flow from Operations was -3.186 + 17.665 + 17.039 + -0.952 = \$30.6 Mil. Accounts Receivable was \$84.4 Mil. Revenue was 100.92 + 114.892 + 101.77 + 100.501 = \$418.1 Mil. Gross Profit was 17.936 + 24.876 + 18.284 + 17.902 = \$79.0 Mil. Total Current Assets was \$266.7 Mil. Total Assets was \$377.9 Mil. Property, Plant and Equipment(Net PPE) was \$18.4 Mil. Depreciation, Depletion and Amortization(DDA) was \$9.3 Mil. Selling, General & Admin. Expense(SGA) was \$36.4 Mil. Total Current Liabilities was \$155.9 Mil. Long-Term Debt was \$0.1 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of daysÂ’ 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) = (101.43 / 505.355) / (84.395 / 418.083) = 0.20071039 / 0.20186183 = 0.9943

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) = (78.998 / 418.083) / (82.346 / 505.355) = 0.18895291 / 0.16294684 = 1.1596

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 - (258.683 + 22.271) / 483.016) / (1 - (266.699 + 18.38) / 377.911) = 0.41833397 / 0.24564514 = 1.703

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 = 505.355 / 418.083 = 1.2087

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)) = (9.315 / (9.315 + 18.38)) / (16.965 / (16.965 + 22.271)) = 0.3363423 / 0.43238353 = 0.7779

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) = (38.093 / 505.355) / (36.414 / 418.083) = 0.07537869 / 0.08709754 = 0.8655

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) = ((77.253 + 183.409) / 483.016) / ((0.051 + 155.902) / 377.911) = 0.539655 / 0.41267124 = 1.3077

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 = (-0.812 - -0.141 - 30.566) / 483.016 = -0.0647

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 -2.34 suggests that the company will not be a manipulator.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

TRC Companies Inc Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 DSRI 1.0227 0.8918 0.4753 1.6522 1.0029 0.4283 2.1526 0.9328 0.6224 0.9601 GMI 0.4073 0.9818 0.9177 0.7118 0.8735 0.9352 1.0661 1.0682 0.8736 1.1369 AQI 1.001 0.8607 0.8852 0.9126 1.0123 0.9708 0.9039 0.8572 1.0466 1.3718 SGI 1.0753 1.0481 1.6924 0.5277 1.0218 1.2367 1.0742 1.1468 1.112 1.1607 DEPI 1.0363 0.9135 0.9362 0.8055 1.4079 1.0085 0.86 0.8265 0.9954 1.0217 SGAI 0.7276 1.6521 0.4445 1.4975 0.9884 0.9544 0.9223 0.8809 1.0811 0.7933 LVGI 1.0742 1.3796 0.9755 0.9666 1.1047 0.8327 0.9173 0.9716 1.0068 1.3548 TATA -0.0132 -0.2742 -0.1276 -0.0995 -0.0779 0.0525 0.0718 -0.0277 -0.0347 -0.1003 M-score -2.74 -4.13 -2.94 -3.05 -2.87 -2.53 -1.00 -2.55 -2.95 -2.70

TRC Companies Inc Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 DSRI 0.9328 0.6348 1.0753 1.0057 0.6224 0.964 1.0089 0.6069 0.9601 0.9943 GMI 1.0682 1.0423 1.0305 0.94 0.8736 0.869 0.9044 1.0112 1.1369 1.1596 AQI 0.8572 0.9142 0.956 0.933 1.0466 0.822 1.428 1.4442 1.3718 1.703 SGI 1.1468 1.1025 1.0815 1.0785 1.112 1.1097 1.1143 1.1398 1.1607 1.2087 DEPI 0.8265 0.8438 0.9257 0.9426 0.9954 1.2326 1.3736 1.1761 1.0217 0.7779 SGAI 0.8809 0.8505 0.845 0.856 1.0811 1.0823 1.0372 1.0124 0.7933 0.8655 LVGI 0.9716 0.9537 0.9947 0.9845 1.0068 1.0298 1.4161 1.3994 1.3548 1.3077 TATA -0.0274 -0.028 -0.0408 -0.0378 -0.0347 -0.0622 -0.0485 -0.106 -0.1003 -0.0647 M-score -2.55 -2.85 -2.51 -2.62 -2.95 -2.84 -2.57 -3.14 -2.70 -2.34
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)