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TRC Companies, Inc. (NYSE:TRR)
Beneish M-Score
-1.74 (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 -1.74 signals that the company is a manipulator.

TRR' s 10-Year Beneish M-Score Range
Min: -200.56   Max: 4.21
Current: -1.74

-200.56
4.21

During the past 13 years, the highest Beneish M-Score of TRC Companies, Inc. was 4.21. The lowest was -200.56. And the median was -2.69.


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 * 1.368+0.528 * 1.019+0.404 * 0.8867+0.892 * 1.1598+0.115 * 0.8171
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9982+4.679 * 0.0624-0.327 * 0.9409
=-1.74

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $158.4 Mil.
Revenue was 91.342 + 93.599 + 87.731 + 84.17 = $356.8 Mil.
Gross Profit was 14.953 + 15.201 + 17.882 + 13.724 = $61.8 Mil.
Total Current Assets was $201.7 Mil.
Total Assets was $320.8 Mil.
Property, Plant and Equipment(Net PPE) was $13.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.2 Mil.
Selling, General & Admin. Expense(SGA) was $34.1 Mil.
Total Current Liabilities was $123.6 Mil.
Long-Term Debt was $0.6 Mil.
Net Income was 3.096 + 2.487 + 24.779 + 3.101 = $33.5 Mil.
Non Operating Income was 0.094 + -0.047 + -0.053 + -0.058 = $-0.1 Mil.
Cash Flow from Operations was -6.524 + 1.075 + 10.965 + 7.994 = $13.5 Mil.
Accounts Receivable was $99.8 Mil.
Revenue was 76.25 + 77.005 + 78.682 + 75.745 = $307.7 Mil.
Gross Profit was 11.686 + 13.319 + 16.421 + 12.835 = $54.3 Mil.
Total Current Assets was $155.7 Mil.
Total Assets was $268.6 Mil.
Property, Plant and Equipment(Net PPE) was $13.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.8 Mil.
Selling, General & Admin. Expense(SGA) was $29.5 Mil.
Total Current Liabilities was $108.9 Mil.
Long-Term Debt was $1.6 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)
=(158.403 / 356.842) / (99.84 / 307.682)
=0.44390234 / 0.32449087
=1.368

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)
=(15.201 / 307.682) / (14.953 / 356.842)
=0.17635416 / 0.1730738
=1.019

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 - (201.651 + 13.534) / 320.804) / (1 - (155.739 + 13.113) / 268.576)
=0.32923218 / 0.37130645
=0.8867

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
=356.842 / 307.682
=1.1598

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))
=(5.843 / (5.843 + 13.113)) / (8.198 / (8.198 + 13.534))
=0.30824014 / 0.37723173
=0.8171

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)
=(34.149 / 356.842) / (29.499 / 307.682)
=0.09569782 / 0.09587496
=0.9982

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)
=((0.632 + 123.558) / 320.804) / ((1.612 + 108.891) / 268.576)
=0.38712111 / 0.41144034
=0.9409

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
=(33.463 - -0.064 - 13.51) / 320.804
=0.0624

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 -1.74 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.

TRC Companies, Inc. Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 1.07741.31740.81781.00190.87960.58441.83030.9560.64641.0721
GMI 1.022314.34040.26030.40730.73871.21970.71180.87350.93521.0661
AQI 1.18160.92721.031.0010.86070.88520.91261.01230.97080.9039
SGI 1.05280.95961.08391.07531.08741.63120.52771.02181.23671.0742
DEPI 0.90750.90820.95171.03630.91350.93620.80551.40791.00850.86
SGAI 1.7131.72981.53460.72761.45750.50381.49750.98840.95440.9223
LVGI 0.87321.28650.94421.07421.37960.97550.96661.10470.83270.9173
TATA -0.0005-0.0781-0.0667-0.0312-0.2842-0.1332-0.1016-0.07790.05250.0718
M-score -2.374.20-3.34-2.84-4.25-2.77-2.90-2.91-2.33-1.99

TRC Companies, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.91631.50110.95050.71020.94110.69391.0341.07191.06311.368
GMI 0.60281.44151.45791.33511.3160.97520.99721.06491.06771.019
AQI 0.95631.00061.00750.97080.95330.95430.92770.90390.8950.8867
SGI 1.07081.01941.08351.12581.07651.13071.09111.07451.1171.1598
DEPI 1.40251.40151.39681.00850.95210.89580.87650.860.83790.8171
SGAI 0.98471.0571.02041.04841.04320.93740.9260.92210.94440.9982
LVGI 1.12621.07051.02310.83270.89250.84430.96110.91730.9170.9409
TATA -0.0971-0.0323-0.01630.05250.04150.05440.01940.07180.04630.0624
M-score -3.17-1.91-2.25-2.18-2.10-2.37-2.30-1.99-2.09-1.74
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