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Trio-Tech International (AMEX:TRT)
Beneish M-Score
-2.92 (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.

Trio-Tech International has a M-score of -2.92 suggests that the company is not a manipulator.

TRT' s 10-Year Beneish M-Score Range
Min: -3.51   Max: 19.35
Current: -2.92

-3.51
19.35

During the past 13 years, the highest Beneish M-Score of Trio-Tech International was 19.35. The lowest was -3.51. And the median was -2.49.


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 Trio-Tech International 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 * 0.8658+0.528 * 0.8735+0.404 * 1.2227+0.892 * 1.1414+0.115 * 1.1208
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0154+4.679 * -0.1074-0.327 * 0.9245
=-2.92

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $8.63 Mil.
Revenue was 9.387 + 8.039 + 9.339 + 9.497 = $36.26 Mil.
Gross Profit was 2.254 + 1.967 + 1.987 + 2.091 = $8.30 Mil.
Total Current Assets was $13.29 Mil.
Total Assets was $34.59 Mil.
Property, Plant and Equipment(Net PPE) was $13.54 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.29 Mil.
Selling, General & Admin. Expense(SGA) was $8.10 Mil.
Total Current Liabilities was $10.72 Mil.
Long-Term Debt was $2.80 Mil.
Net Income was 0.282 + 0.157 + -0.365 + -0.017 = $0.06 Mil.
Non Operating Income was -0.11 + 0.068 + -0.206 + 0.161 = $-0.09 Mil.
Cash Flow from Operations was 0.706 + 0.953 + 0.988 + 1.213 = $3.86 Mil.
Accounts Receivable was $8.73 Mil.
Revenue was 8.516 + 6.458 + 7.221 + 9.575 = $31.77 Mil.
Gross Profit was 1.697 + 1.267 + 1.548 + 1.839 = $6.35 Mil.
Total Current Assets was $16.58 Mil.
Total Assets was $36.04 Mil.
Property, Plant and Equipment(Net PPE) was $12.85 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.49 Mil.
Selling, General & Admin. Expense(SGA) was $6.99 Mil.
Total Current Liabilities was $12.39 Mil.
Long-Term Debt was $2.84 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)
=(8.625 / 36.262) / (8.728 / 31.77)
=0.2378523 / 0.27472458
=0.8658

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)
=(1.967 / 31.77) / (2.254 / 36.262)
=0.19990557 / 0.22886217
=0.8735

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 - (13.287 + 13.541) / 34.59) / (1 - (16.578 + 12.851) / 36.044)
=0.22440012 / 0.18352569
=1.2227

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
=36.262 / 31.77
=1.1414

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))
=(2.491 / (2.491 + 12.851)) / (2.294 / (2.294 + 13.541))
=0.16236475 / 0.14486896
=1.1208

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)
=(8.095 / 36.262) / (6.985 / 31.77)
=0.22323645 / 0.2198615
=1.0154

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)
=((2.798 + 10.718) / 34.59) / ((2.841 + 12.394) / 36.044)
=0.39074877 / 0.42267784
=0.9245

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
=(0.057 - -0.087 - 3.86) / 34.59
=-0.1074

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.

Trio-Tech International has a M-score of -2.92 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.

Trio-Tech International Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 0.8421.75590.54150.89011.41131.65140.5831.89720.75540.8658
GMI 1.02650.88531.05371.16450.91241.28110.81181.41680.82660.8735
AQI 1.06010.57191.22664.5832.54240.57161.43790.93151.02681.2227
SGI 1.3431.16111.60660.86450.49471.84690.96230.87521.02151.1414
DEPI 1.03150.87850.71871.1071.02451.61491.01520.88151.04081.1208
SGAI 0.91731.13670.65331.28321.45390.61311.31221.00610.88981.0151
LVGI 1.00610.89280.81161.02840.61972.51220.6751.53950.97740.9245
TATA -0.04520.3196-0.1413-0.0778-0.1193-0.005-0.15830.0077-0.1315-0.1075
M-score -2.48-0.38-2.81-1.58-2.48-1.53-3.51-1.73-3.35-2.92

Trio-Tech International Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.83031.89721.57030.76130.79060.75540.81991.28981.11270.8658
GMI 1.64231.41681.27270.87060.67860.82660.83990.94170.97690.8735
AQI 0.95060.93150.93791.11451.10841.02681.09830.94920.98741.2227
SGI 0.72840.87521.01821.14461.04481.02150.99421.0411.12661.1414
DEPI 0.95460.88150.97870.97611.00061.04080.97751.05231.02981.1208
SGAI 1.40781.00610.7980.67160.75580.88950.98121.04170.99771.0154
LVGI 1.38511.53951.31581.02380.93650.97740.94481.09021.10180.9245
TATA -0.03920.00770.0132-0.1149-0.1427-0.1315-0.1711-0.0806-0.0757-0.1074
M-score -2.02-1.73-1.83-3.08-3.36-3.35-3.48-2.64-2.66-2.92
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