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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.62 (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 -2.62 suggests that the company is not a manipulator.

TRR' s 10-Year Beneish M-Score Range
Min: -200.6   Max: 4.15
Current: -2.62

-200.6
4.15

During the past 13 years, the highest Beneish M-Score of TRC Companies Inc was 4.15. The lowest was -200.60. 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 * 1.0057+0.528 * 0.94+0.404 * 0.933+0.892 * 1.0785+0.115 * 0.9426
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.856+4.679 * -0.0379-0.327 * 0.9845
=-2.62

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $133.9 Mil.
Revenue was 101.77 + 100.501 + 97.485 + 94.779 = $394.5 Mil.
Gross Profit was 18.284 + 17.902 + 16.295 + 17.585 = $70.1 Mil.
Total Current Assets was $229.7 Mil.
Total Assets was $343.7 Mil.
Property, Plant and Equipment(Net PPE) was $13.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.3 Mil.
Selling, General & Admin. Expense(SGA) was $31.8 Mil.
Total Current Liabilities was $135.0 Mil.
Long-Term Debt was $0.1 Mil.
Net Income was 5.165 + 4.002 + 3.485 + 5.037 = $17.7 Mil.
Non Operating Income was -0.023 + 0 + -0.022 + -0.026 = $-0.1 Mil.
Cash Flow from Operations was 11.374 + -1.292 + 2.498 + 18.209 = $30.8 Mil.
Accounts Receivable was $123.5 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.



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)
=(133.932 / 394.535) / (123.491 / 365.834)
=0.33946798 / 0.3375602
=1.0057

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)
=(17.902 / 365.834) / (18.284 / 394.535)
=0.16693637 / 0.17759134
=0.94

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 - (229.726 + 13.218) / 343.654) / (1 - (214.764 + 13.346) / 332.563)
=0.29305639 / 0.31408485
=0.933

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
=394.535 / 365.834
=1.0785

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))
=(8.531 / (8.531 + 13.346)) / (9.327 / (9.327 + 13.218))
=0.38995292 / 0.41370592
=0.9426

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)
=(31.771 / 394.535) / (34.416 / 365.834)
=0.08052771 / 0.09407545
=0.856

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)
=((0.06 + 134.984) / 343.654) / ((0.456 + 132.289) / 332.563)
=0.39296502 / 0.39915745
=0.9845

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
=(17.689 - -0.071 - 30.789) / 343.654
=-0.0379

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 -2.62 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.41021.08242.1520.97341.00810.98850.93280.63481.07531.0057
GMI 0.97520.99721.06491.06771.0191.04511.06821.04231.03050.94
AQI 0.95430.92770.90390.8950.88670.85210.85720.91420.9560.933
SGI 1.13071.09111.07451.1171.15981.15731.14681.10251.08151.0785
DEPI 0.89580.87650.860.83790.81710.81630.82650.84380.92570.9426
SGAI 0.93740.9260.92210.94440.99821.00780.88090.85050.8450.856
LVGI 0.84430.96110.91730.9170.94090.91070.97160.95370.99470.9845
TATA 0.05440.01940.07180.04630.06270.0536-0.0274-0.028-0.0409-0.0379
M-score -1.71-2.25-1.00-2.17-2.07-2.13-2.55-2.85-2.51-2.62
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