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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

TRR' s 10-Year Beneish M-Score Range
Min: -15.71   Max: 0.4
Current: -2.85

-15.71
0.4

During the past 13 years, the highest Beneish M-Score of TRC Companies Inc was 0.40. The lowest was -15.71. And the median was -2.66.


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 * 0.6348+0.528 * 1.0423+0.404 * 0.9142+0.892 * 1.1025+0.115 * 0.8438
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8505+4.679 * -0.0282-0.327 * 0.9537
=-2.85

* 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 $78.9 Mil.
Revenue was 97.485 + 94.779 + 93.162 + 91.342 = $376.8 Mil.
Gross Profit was 16.295 + 17.585 + 13.035 + 14.953 = $61.9 Mil.
Total Current Assets was $229.1 Mil.
Total Assets was $344.6 Mil.
Property, Plant and Equipment(Net PPE) was $12.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.9 Mil.
Selling, General & Admin. Expense(SGA) was $30.3 Mil.
Total Current Liabilities was $137.9 Mil.
Long-Term Debt was $0.2 Mil.
Net Income was 3.485 + 5.037 + 1.431 + 3.096 = $13.0 Mil.
Non Operating Income was -0.022 + -0.026 + -0.073 + 0.094 = $-0.0 Mil.
Cash Flow from Operations was 2.498 + 18.209 + 8.626 + -6.524 = $22.8 Mil.
Accounts Receivable was $112.7 Mil.
Revenue was 93.599 + 87.731 + 84.17 + 76.25 = $341.8 Mil.
Gross Profit was 15.201 + 17.882 + 13.724 + 11.686 = $58.5 Mil.
Total Current Assets was $210.3 Mil.
Total Assets was $333.2 Mil.
Property, Plant and Equipment(Net PPE) was $14.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.5 Mil.
Selling, General & Admin. Expense(SGA) was $32.3 Mil.
Total Current Liabilities was $139.0 Mil.
Long-Term Debt was $1.0 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)
=(78.893 / 376.768) / (112.721 / 341.75)
=0.20939411 / 0.32983467
=0.6348

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)
=(17.585 / 341.75) / (16.295 / 376.768)
=0.17115728 / 0.16420715
=1.0423

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 - (229.058 + 12.552) / 344.582) / (1 - (210.252 + 14.016) / 333.169)
=0.29883163 / 0.32686414
=0.9142

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
=376.768 / 341.75
=1.1025

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))
=(7.541 / (7.541 + 14.016)) / (8.889 / (8.889 + 12.552))
=0.34981676 / 0.41457954
=0.8438

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)
=(30.32 / 376.768) / (32.335 / 341.75)
=0.08047393 / 0.09461595
=0.8505

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)
=((0.168 + 137.922) / 344.582) / ((0.996 + 138.998) / 333.169)
=0.40074641 / 0.42018915
=0.9537

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
=(13.049 - -0.027 - 22.809) / 344.582
=-0.0282

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 -2.85 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

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 1.20220.82991.04160.89180.78110.70831.42360.42832.15260.9328
GMI -27.1101-0.13940.44220.98180.55841.66040.61530.93521.06611.0682
AQI 1.11161.03340.99770.86070.88520.91261.01230.97080.90390.8572
SGI 0.97551.06381.05581.04811.02981.2310.71981.23671.07421.1468
DEPI 0.90730.95171.03630.91350.93620.80551.40791.00850.860.8265
SGAI 1.75112.09440.73311.65210.73050.66911.34610.95440.92230.8809
LVGI 1.16760.94741.07071.37960.97550.96661.10470.83270.91730.9716
TATA -0.0781-0.0669-0.0312-0.1038-0.1332-0.1016-0.07940.05140.0718-0.0277
M-score -17.67-3.66-2.81-3.33-3.51-2.66-2.96-2.54-1.00-2.55

TRC Companies Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.45950.98791.76071.33772.64660.96850.90020.91420.83780.6348
GMI 0.55820.87443.31573.23193.26281.04330.44830.47090.49361.0423
AQI 0.97080.95330.95430.92770.90390.8950.88670.85210.85720.9142
SGI 1.15281.0710.90570.88280.87371.12281.29881.29171.27681.1025
DEPI 1.00850.95210.89580.87650.860.83790.81710.81630.82650.8438
SGAI 1.02381.04851.17041.14451.1340.93960.89130.90290.79120.8505
LVGI 0.83270.89250.84430.96110.91730.9170.94090.91070.97160.9537
TATA 0.05140.04040.05330.01840.07180.04630.06240.0533-0.0277-0.0282
M-score -2.79-2.30-0.40-1.060.40-2.18-2.33-2.36-2.81-2.85
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