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TRC Companies Inc (NYSE:TRR)
Beneish M-Score
-2.51 (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 -2.51 suggests that the company is not a manipulator.

TRR' s 10-Year Beneish M-Score Range
Min: -200.6   Max: 4.15
Current: -2.51

-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 * 1.0753+0.528 * 1.0305+0.404 * 0.956+0.892 * 1.0815+0.115 * 0.9257
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.845+4.679 * -0.0409-0.327 * 0.9947
=-2.51

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $135.8 Mil.
Revenue was 100.501 + 97.485 + 94.779 + 93.162 = $385.9 Mil.
Gross Profit was 17.902 + 16.295 + 17.585 + 13.035 = $64.8 Mil.
Total Current Assets was $220.8 Mil.
Total Assets was $341.9 Mil.
Property, Plant and Equipment(Net PPE) was $13.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.3 Mil.
Selling, General & Admin. Expense(SGA) was $31.2 Mil.
Total Current Liabilities was $131.5 Mil.
Long-Term Debt was $0.1 Mil.
Net Income was 4.002 + 3.485 + 5.037 + 1.431 = $14.0 Mil.
Non Operating Income was 0 + -0.022 + -0.026 + -0.073 = $-0.1 Mil.
Cash Flow from Operations was -1.292 + 2.498 + 18.209 + 8.626 = $28.0 Mil.
Accounts Receivable was $116.7 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.



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)
=(135.754 / 385.927) / (116.732 / 356.842)
=0.35176083 / 0.32712517
=1.0753

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)
=(16.295 / 356.842) / (17.902 / 385.927)
=0.1730738 / 0.16795145
=1.0305

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 - (220.767 + 13.492) / 341.85) / (1 - (201.651 + 13.534) / 320.804)
=0.31473161 / 0.32923218
=0.956

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
=385.927 / 356.842
=1.0815

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))
=(8.198 / (8.198 + 13.534)) / (9.28 / (9.28 + 13.492))
=0.37723173 / 0.407518
=0.9257

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)
=(31.207 / 385.927) / (34.149 / 356.842)
=0.08086244 / 0.09569782
=0.845

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)
=((0.097 + 131.537) / 341.85) / ((0.632 + 123.558) / 320.804)
=0.38506362 / 0.38712111
=0.9947

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
=(13.955 - -0.121 - 28.041) / 341.85
=-0.0409

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 -2.51 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.98291.41021.08242.1520.97341.00810.98850.93280.63481.0753
GMI 1.3160.97520.99721.06491.06771.0191.04511.06821.04231.0305
AQI 0.95330.95430.92770.90390.8950.88670.85210.85720.91420.956
SGI 1.07651.13071.09111.07451.1171.15981.15731.14681.10251.0815
DEPI 0.95210.89580.87650.860.83790.81710.81630.82650.84380.9257
SGAI 1.04320.93740.9260.92210.94440.99821.00780.88090.85050.845
LVGI 0.89250.84430.96110.91730.9170.94090.91070.97160.95370.9947
TATA 0.04150.05440.01940.07180.04630.06270.0536-0.0274-0.028-0.0409
M-score -2.06-1.71-2.25-1.00-2.17-2.07-2.13-2.55-2.85-2.51
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