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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

TRR' s Beneish M-Score Range Over the Past 10 Years
Min: -5.04   Max: 4.28
Current: -2.7

-5.04
4.28

During the past 13 years, the highest Beneish M-Score of TRC Companies Inc was 4.28. The lowest was -5.04. And the median was -2.72.


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 * 0.9601+0.528 * 1.1369+0.404 * 1.3718+0.892 * 1.1607+0.115 * 1.0217
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8136+4.679 * -0.1003-0.327 * 1.3548
=-2.70

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $90.2 Mil.
Revenue was 146.513 + 121.426 + 112.44 + 100.92 = $481.3 Mil.
Gross Profit was 24.886 + 17.396 + 18.764 + 17.936 = $79.0 Mil.
Total Current Assets was $248.2 Mil.
Total Assets was $478.5 Mil.
Property, Plant and Equipment(Net PPE) was $22.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.7 Mil.
Selling, General & Admin. Expense(SGA) was $35.3 Mil.
Total Current Liabilities was $178.4 Mil.
Long-Term Debt was $79.2 Mil.
Net Income was 5.909 + -14.297 + 3.937 + 4.492 = $0.0 Mil.
Non Operating Income was -0.053 + -0.027 + -0.027 + -0.015 = $-0.1 Mil.
Cash Flow from Operations was 17.665 + 17.039 + -0.952 + 14.388 = $48.1 Mil.
Accounts Receivable was $80.9 Mil.
Revenue was 114.892 + 101.77 + 100.501 + 97.485 = $414.6 Mil.
Gross Profit was 24.876 + 18.284 + 17.902 + 16.295 = $77.4 Mil.
Total Current Assets was $234.3 Mil.
Total Assets was $362.9 Mil.
Property, Plant and Equipment(Net PPE) was $13.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.3 Mil.
Selling, General & Admin. Expense(SGA) was $37.3 Mil.
Total Current Liabilities was $144.2 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)
=(90.194 / 481.299) / (80.932 / 414.648)
=0.18739702 / 0.19518242
=0.9601

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)
=(77.357 / 414.648) / (78.982 / 481.299)
=0.18656065 / 0.16410173
=1.1369

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 - (248.245 + 22.46) / 478.478) / (1 - (234.303 + 13.709) / 362.881)
=0.43423731 / 0.3165473
=1.3718

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
=481.299 / 414.648
=1.1607

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))
=(9.316 / (9.316 + 13.709)) / (14.725 / (14.725 + 22.46))
=0.40460369 / 0.39599301
=1.0217

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)
=(35.253 / 481.299) / (37.331 / 414.648)
=0.07324553 / 0.09003058
=0.8136

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)
=((79.243 + 178.443) / 478.478) / ((0.055 + 144.196) / 362.881)
=0.5385535 / 0.39751599
=1.3548

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
=(0.041 - -0.122 - 48.14) / 478.478
=-0.1003

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 -2.70 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

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.02270.85960.49311.65221.00290.42832.15260.93280.62240.9601
GMI 0.40730.73871.21970.71180.87350.93521.06611.06820.87361.1369
AQI 1.0010.86070.88520.91261.01230.97080.90390.85721.04661.3718
SGI 1.07531.08741.63120.52771.02181.23671.07421.14681.1121.1607
DEPI 1.03630.91350.93620.80551.40791.00850.860.82650.99541.0217
SGAI 0.72761.45750.50381.49750.98840.95440.92230.88091.08110.7933
LVGI 1.07421.37960.97550.96661.10470.83270.91730.97161.00681.3548
TATA -0.0132-0.2742-0.1276-0.0995-0.07790.05250.0718-0.0277-0.0347-0.1003
M-score -2.74-4.22-2.82-3.05-2.87-2.53-1.00-2.55-2.95-2.70

TRC Companies Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.98850.93280.63481.07531.00570.62240.9641.00890.60690.9601
GMI 1.04511.06821.04231.03050.940.87360.8690.90441.01121.1369
AQI 0.85210.85720.91420.9560.9331.04660.8221.4281.44421.3718
SGI 1.15731.14681.10251.08151.07851.1121.10971.11431.13981.1607
DEPI 0.81630.82650.84380.92570.94260.99541.23261.37361.17611.0217
SGAI 1.00780.88090.85050.8450.8561.08111.10841.06241.03670.8136
LVGI 0.91070.97160.95370.99470.98451.00681.02981.41611.39941.3548
TATA 0.0536-0.0274-0.028-0.0408-0.0378-0.0347-0.0622-0.0485-0.106-0.1003
M-score -2.13-2.55-2.85-2.51-2.62-2.95-2.85-2.58-3.14-2.70
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