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Trio-Tech International (AMEX:TRT)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

TRT' s Beneish M-Score Range Over the Past 10 Years
Min: -4.07   Max: 21.1
Current: -2.8

-4.07
21.1

During the past 13 years, the highest Beneish M-Score of Trio-Tech International was 21.10. The lowest was -4.07. And the median was -2.80.


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 * 1.1006+0.528 * 1.0154+0.404 * 0.889+0.892 * 0.9747+0.115 * 1.0907
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9421+4.679 * -0.0806-0.327 * 0.9944
=-2.80

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $8.97 Mil.
Revenue was 9.355 + 8.354 + 7.93 + 8.399 = $34.04 Mil.
Gross Profit was 2.132 + 2.115 + 2.178 + 2.197 = $8.62 Mil.
Total Current Assets was $14.78 Mil.
Total Assets was $32.09 Mil.
Property, Plant and Equipment(Net PPE) was $11.31 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.87 Mil.
Selling, General & Admin. Expense(SGA) was $7.19 Mil.
Total Current Liabilities was $8.67 Mil.
Long-Term Debt was $2.32 Mil.
Net Income was 0.15 + 0.19 + 0.259 + 0.352 = $0.95 Mil.
Non Operating Income was -0.105 + 0.014 + 0.205 + 0.38 = $0.49 Mil.
Cash Flow from Operations was -0.003 + 0.661 + 0.688 + 1.698 = $3.04 Mil.
Accounts Receivable was $8.36 Mil.
Revenue was 8.543 + 8.897 + 8.093 + 9.387 = $34.92 Mil.
Gross Profit was 2.488 + 2.443 + 1.797 + 2.254 = $8.98 Mil.
Total Current Assets was $12.83 Mil.
Total Assets was $31.71 Mil.
Property, Plant and Equipment(Net PPE) was $12.21 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.24 Mil.
Selling, General & Admin. Expense(SGA) was $7.83 Mil.
Total Current Liabilities was $8.53 Mil.
Long-Term Debt was $2.39 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)
=(8.97 / 34.038) / (8.361 / 34.92)
=0.263529 / 0.23943299
=1.1006

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)
=(2.115 / 34.92) / (2.132 / 34.038)
=0.25721649 / 0.25330513
=1.0154

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 - (14.778 + 11.313) / 32.09) / (1 - (12.834 + 12.208) / 31.71)
=0.18694297 / 0.21028067
=0.889

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
=34.038 / 34.92
=0.9747

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))
=(2.238 / (2.238 + 12.208)) / (1.873 / (1.873 + 11.313))
=0.15492178 / 0.14204459
=1.0907

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)
=(7.19 / 34.038) / (7.83 / 34.92)
=0.2112345 / 0.2242268
=0.9421

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)
=((2.319 + 8.669) / 32.09) / ((2.392 + 8.527) / 31.71)
=0.34241197 / 0.34433933
=0.9944

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
=(0.951 - 0.494 - 3.044) / 32.09
=-0.0806

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 -2.80 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

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 1.80020.54150.89231.4041.65570.5831.72470.83090.86580.9757
GMI 0.88021.05371.1750.92661.25020.81181.74680.67040.87350.8701
AQI 0.57191.22664.5832.54240.57161.43790.93151.02681.22270.8285
SGI 1.13251.60660.86230.49731.84210.96230.96270.92861.14140.9357
DEPI 0.87850.71871.1071.02451.61491.01520.88151.04121.12040.9547
SGAI 1.11880.65331.28651.46210.60811.31220.99590.89891.01510.9987
LVGI 0.89280.81161.02840.61972.51220.6751.53950.97740.92450.8742
TATA 0.3256-0.1466-0.0808-0.1175-0.0194-0.15830.0176-0.1315-0.1075-0.1225
M-score -0.34-2.84-1.59-2.47-1.61-3.51-1.59-3.45-2.92-3.23

Trio-Tech International Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.28981.11270.86580.79340.87681.03810.97571.00520.91881.1006
GMI 0.94170.97690.87350.90730.84720.85050.87010.83330.90981.0154
AQI 0.94920.98741.22271.16461.1671.02580.82850.79690.80530.889
SGI 1.0411.12661.14141.09991.01790.98670.93570.96880.96540.9747
DEPI 1.05231.02981.12081.11111.01111.00790.95470.93620.98971.0907
SGAI 1.04170.99771.01541.00841.02941.04581.00020.98210.98890.9421
LVGI 1.09021.10180.92450.91170.90980.87760.87420.93580.91710.9944
TATA -0.0806-0.0757-0.1133-0.0936-0.0978-0.0864-0.1233-0.1309-0.1061-0.0806
M-score -2.64-2.66-2.95-2.96-3.02-2.90-3.24-3.27-3.18-2.80
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