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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.28 (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 -2.28 suggests that the company is not a manipulator.

TRR' s 10-Year Beneish M-Score Range
Min: -200.56   Max: 4.21
Current: -2.28

-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 * 0.8229+0.528 * 1.0451+0.404 * 0.8521+0.892 * 1.1573+0.115 * 0.8163
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0078+4.679 * 0.0533-0.327 * 0.9107
=-2.28

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $127.5 Mil.
Revenue was 93.162 + 91.342 + 93.599 + 87.731 = $365.8 Mil.
Gross Profit was 13.035 + 14.953 + 15.201 + 17.882 = $61.1 Mil.
Total Current Assets was $214.8 Mil.
Total Assets was $332.6 Mil.
Property, Plant and Equipment(Net PPE) was $13.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.5 Mil.
Selling, General & Admin. Expense(SGA) was $34.4 Mil.
Total Current Liabilities was $132.3 Mil.
Long-Term Debt was $0.5 Mil.
Net Income was 1.431 + 3.096 + 2.487 + 24.779 = $31.8 Mil.
Non Operating Income was -0.073 + 0.094 + -0.047 + -0.053 = $-0.1 Mil.
Cash Flow from Operations was 8.626 + -6.524 + 1.075 + 10.965 = $14.1 Mil.
Accounts Receivable was $133.9 Mil.
Revenue was 84.17 + 76.25 + 77.005 + 78.682 = $316.1 Mil.
Gross Profit was 13.724 + 11.686 + 13.319 + 16.421 = $55.2 Mil.
Total Current Assets was $163.8 Mil.
Total Assets was $281.2 Mil.
Property, Plant and Equipment(Net PPE) was $13.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.4 Mil.
Selling, General & Admin. Expense(SGA) was $29.5 Mil.
Total Current Liabilities was $121.5 Mil.
Long-Term Debt was $1.7 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)
=(127.478 / 365.834) / (133.85 / 316.107)
=0.34845859 / 0.42343257
=0.8229

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)
=(14.953 / 316.107) / (13.035 / 365.834)
=0.17446624 / 0.16693637
=1.0451

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 - (214.764 + 13.346) / 332.563) / (1 - (163.769 + 13.792) / 281.226)
=0.31408485 / 0.36861812
=0.8521

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
=365.834 / 316.107
=1.1573

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))
=(6.44 / (6.44 + 13.792)) / (8.531 / (8.531 + 13.346))
=0.31830763 / 0.38995292
=0.8163

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)
=(34.416 / 365.834) / (29.508 / 316.107)
=0.09407545 / 0.09334814
=1.0078

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)
=((0.456 + 132.289) / 332.563) / ((1.723 + 121.534) / 281.226)
=0.39915745 / 0.43828451
=0.9107

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
=(31.793 - -0.079 - 14.142) / 332.563
=0.0533

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 -2.28 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

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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.50110.95050.71020.94110.69391.0341.07191.06311.3680.8229
GMI 1.44151.45791.33511.3160.97520.99721.06491.06771.0191.0451
AQI 1.00061.00750.97080.95330.95430.92770.90390.8950.88670.8521
SGI 1.01941.08351.12581.07651.13071.09111.07451.1171.15981.1573
DEPI 1.40151.39681.00850.95210.89580.87650.860.83790.81710.8163
SGAI 1.0571.02041.04841.04320.93740.9260.92210.94440.99821.0078
LVGI 1.07051.02310.83270.89250.84430.96110.91730.9170.94090.9107
TATA -0.0323-0.01630.05250.04150.05440.01940.07180.04630.06240.0533
M-score -1.91-2.25-2.18-2.10-2.37-2.30-1.99-2.09-1.74-2.28
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