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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.55 (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 -2.55 suggests that the company is not a manipulator.

TRR' s 10-Year Beneish M-Score Range
Min: -5.07   Max: 4.15
Current: -2.55

-5.07
4.15

During the past 13 years, the highest Beneish M-Score of TRC Companies Inc was 4.15. The lowest was -5.07. And the median was -2.70.


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 * 0.9328+0.528 * 1.0682+0.404 * 0.8572+0.892 * 1.1468+0.115 * 0.8265
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8809+4.679 * -0.0277-0.327 * 0.9716
=-2.55

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $116.9 Mil.
Revenue was 94.779 + 93.162 + 91.342 + 93.599 = $372.9 Mil.
Gross Profit was 17.585 + 13.035 + 14.953 + 15.201 = $60.8 Mil.
Total Current Assets was $221.0 Mil.
Total Assets was $335.6 Mil.
Property, Plant and Equipment(Net PPE) was $13.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.8 Mil.
Selling, General & Admin. Expense(SGA) was $31.1 Mil.
Total Current Liabilities was $132.2 Mil.
Long-Term Debt was $0.3 Mil.
Net Income was 5.037 + 1.431 + 3.096 + 2.487 = $12.1 Mil.
Non Operating Income was -0.026 + -0.073 + 0.094 + -0.047 = $-0.1 Mil.
Cash Flow from Operations was 18.209 + 8.626 + -6.524 + 1.075 = $21.4 Mil.
Accounts Receivable was $109.3 Mil.
Revenue was 87.731 + 84.17 + 76.25 + 77.005 = $325.2 Mil.
Gross Profit was 17.882 + 13.724 + 11.686 + 13.319 = $56.6 Mil.
Total Current Assets was $185.4 Mil.
Total Assets was $307.8 Mil.
Property, Plant and Equipment(Net PPE) was $13.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.9 Mil.
Selling, General & Admin. Expense(SGA) was $30.7 Mil.
Total Current Liabilities was $123.7 Mil.
Long-Term Debt was $1.4 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)
=(116.937 / 372.882) / (109.32 / 325.156)
=0.31360323 / 0.33620785
=0.9328

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)
=(13.035 / 325.156) / (17.585 / 372.882)
=0.17410412 / 0.16298454
=1.0682

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 - (221.041 + 13.05) / 335.585) / (1 - (185.35 + 13.834) / 307.764)
=0.30243902 / 0.3528028
=0.8572

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
=372.882 / 325.156
=1.1468

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))
=(6.903 / (6.903 + 13.834)) / (8.8 / (8.8 + 13.05))
=0.33288325 / 0.402746
=0.8265

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)
=(31.053 / 372.882) / (30.739 / 325.156)
=0.08327836 / 0.09453616
=0.8809

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)
=((0.272 + 132.225) / 335.585) / ((1.357 + 123.713) / 307.764)
=0.39482396 / 0.40638281
=0.9716

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
=(12.051 - -0.052 - 21.386) / 335.585
=-0.0277

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 -2.55 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 1.25720.81451.02270.85960.49311.65221.00290.42832.15260.9328
GMI 14.34040.26030.40730.73871.21970.71180.87350.93521.06611.0682
AQI 0.92721.031.0010.86070.88520.91261.01230.97080.90390.8572
SGI 0.95961.08391.07531.08741.63120.52771.02181.23671.07421.1468
DEPI 0.90820.95171.03630.91350.93620.80551.40791.00850.860.8265
SGAI 1.72981.53460.72761.45750.50381.49750.98840.95440.92230.8809
LVGI 1.28650.94421.07421.37960.97550.96661.10470.83270.91730.9716
TATA -0.0781-0.0667-0.0312-0.2842-0.1332-0.1016-0.07790.05250.0718-0.0277
M-score 4.14-3.35-2.82-4.27-2.85-3.06-2.87-2.53-1.00-2.55

TRC Companies Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.06540.47050.98291.41021.08242.1520.97341.00811.02040.9328
GMI 1.45791.33511.3160.97520.99721.06491.06771.0191.04511.0682
AQI 1.00750.97080.95330.95430.92770.90390.8950.88670.85210.8572
SGI 1.08351.12581.07651.13071.09111.07451.1171.15981.15731.1468
DEPI 1.39681.00850.95210.89580.87650.860.83790.81710.81630.8265
SGAI 1.02041.04841.04320.93740.9260.92210.94440.99821.00780.8809
LVGI 1.02310.83270.89250.84430.96110.91730.9170.94090.91070.9716
TATA -0.01630.05250.04150.05440.01940.07180.04630.06240.0533-0.0277
M-score -2.14-2.40-2.06-1.71-2.25-1.00-2.17-2.08-2.10-2.55
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