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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.34 (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 -2.34 suggests that the company is not a manipulator.

TRR' s Beneish M-Score Range Over the Past 10 Years
Min: -200.48   Max: 4.28
Current: -2.34

-200.48
4.28

During the past 13 years, the highest Beneish M-Score of TRC Companies Inc was 4.28. The lowest was -200.48. And the median was -2.71.


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 * 0.9943+0.528 * 1.1596+0.404 * 1.703+0.892 * 1.2087+0.115 * 0.7779
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8655+4.679 * -0.0647-0.327 * 1.3077
=-2.34

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $101.4 Mil.
Revenue was 124.976 + 146.513 + 121.426 + 112.44 = $505.4 Mil.
Gross Profit was 21.3 + 24.886 + 17.396 + 18.764 = $82.3 Mil.
Total Current Assets was $258.7 Mil.
Total Assets was $483.0 Mil.
Property, Plant and Equipment(Net PPE) was $22.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.0 Mil.
Selling, General & Admin. Expense(SGA) was $38.1 Mil.
Total Current Liabilities was $183.4 Mil.
Long-Term Debt was $77.3 Mil.
Net Income was 3.639 + 5.909 + -14.297 + 3.937 = $-0.8 Mil.
Non Operating Income was -0.034 + -0.053 + -0.027 + -0.027 = $-0.1 Mil.
Cash Flow from Operations was -3.186 + 17.665 + 17.039 + -0.952 = $30.6 Mil.
Accounts Receivable was $84.4 Mil.
Revenue was 100.92 + 114.892 + 101.77 + 100.501 = $418.1 Mil.
Gross Profit was 17.936 + 24.876 + 18.284 + 17.902 = $79.0 Mil.
Total Current Assets was $266.7 Mil.
Total Assets was $377.9 Mil.
Property, Plant and Equipment(Net PPE) was $18.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.3 Mil.
Selling, General & Admin. Expense(SGA) was $36.4 Mil.
Total Current Liabilities was $155.9 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)
=(101.43 / 505.355) / (84.395 / 418.083)
=0.20071039 / 0.20186183
=0.9943

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)
=(78.998 / 418.083) / (82.346 / 505.355)
=0.18895291 / 0.16294684
=1.1596

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 - (258.683 + 22.271) / 483.016) / (1 - (266.699 + 18.38) / 377.911)
=0.41833397 / 0.24564514
=1.703

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
=505.355 / 418.083
=1.2087

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))
=(9.315 / (9.315 + 18.38)) / (16.965 / (16.965 + 22.271))
=0.3363423 / 0.43238353
=0.7779

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)
=(38.093 / 505.355) / (36.414 / 418.083)
=0.07537869 / 0.08709754
=0.8655

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)
=((77.253 + 183.409) / 483.016) / ((0.051 + 155.902) / 377.911)
=0.539655 / 0.41267124
=1.3077

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
=(-0.812 - -0.141 - 30.566) / 483.016
=-0.0647

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 -2.34 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 local exchange's currency.

TRC Companies Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 1.02270.89180.47531.65221.00290.42832.15260.93280.62240.9601
GMI 0.40730.98180.91770.71180.87350.93521.06611.06820.87361.1369
AQI 1.0010.86070.88520.91261.01230.97080.90390.85721.04661.3718
SGI 1.07531.04811.69240.52771.02181.23671.07421.14681.1121.1607
DEPI 1.03630.91350.93620.80551.40791.00850.860.82650.99541.0217
SGAI 0.72761.65210.44451.49750.98840.95440.92230.88091.08110.7933
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 -2.74-4.13-2.94-3.05-2.87-2.53-1.00-2.55-2.95-2.70

TRC Companies Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.93280.63481.07531.00570.62240.9641.00890.60690.96010.9943
GMI 1.06821.04231.03050.940.87360.8690.90441.01121.13691.1596
AQI 0.85720.91420.9560.9331.04660.8221.4281.44421.37181.703
SGI 1.14681.10251.08151.07851.1121.10971.11431.13981.16071.2087
DEPI 0.82650.84380.92570.94260.99541.23261.37361.17611.02170.7779
SGAI 0.88090.85050.8450.8561.08111.08231.03721.01240.79330.8655
LVGI 0.97160.95370.99470.98451.00681.02981.41611.39941.35481.3077
TATA -0.0274-0.028-0.0408-0.0378-0.0347-0.0622-0.0485-0.106-0.1003-0.0647
M-score -2.55-2.85-2.51-2.62-2.95-2.84-2.57-3.14-2.70-2.34
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