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Trio-Tech International (AMEX:TRT)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

TRT' s 10-Year Beneish M-Score Range
Min: -4.07   Max: 21.11
Current: -2.94

-4.07
21.11

During the past 13 years, the highest Beneish M-Score of Trio-Tech International was 21.11. The lowest was -4.07. And the median was -2.54.


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 * 0.7934+0.528 * 0.9073+0.404 * 1.1646+0.892 * 1.0999+0.115 * 1.1111
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0084+4.679 * -0.0891-0.327 * 0.9117
=-2.94

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $7.85 Mil.
Revenue was 8.093 + 9.387 + 8.039 + 9.339 = $34.86 Mil.
Gross Profit was 1.797 + 2.254 + 1.967 + 1.987 = $8.01 Mil.
Total Current Assets was $12.28 Mil.
Total Assets was $33.34 Mil.
Property, Plant and Equipment(Net PPE) was $13.33 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.32 Mil.
Selling, General & Admin. Expense(SGA) was $7.93 Mil.
Total Current Liabilities was $9.56 Mil.
Long-Term Debt was $2.69 Mil.
Net Income was -0.136 + 0.282 + 0.157 + -0.365 = $-0.06 Mil.
Non Operating Income was 0.043 + -0.11 + 0.068 + -0.206 = $-0.21 Mil.
Cash Flow from Operations was 0.466 + 0.706 + 0.953 + 0.988 = $3.11 Mil.
Accounts Receivable was $9.00 Mil.
Revenue was 9.497 + 8.516 + 6.458 + 7.221 = $31.69 Mil.
Gross Profit was 2.091 + 1.697 + 1.267 + 1.548 = $6.60 Mil.
Total Current Assets was $15.52 Mil.
Total Assets was $35.04 Mil.
Property, Plant and Equipment(Net PPE) was $12.54 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.47 Mil.
Selling, General & Admin. Expense(SGA) was $7.15 Mil.
Total Current Liabilities was $11.49 Mil.
Long-Term Debt was $2.62 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)
=(7.85 / 34.858) / (8.996 / 31.692)
=0.22519938 / 0.28385712
=0.7934

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)
=(2.254 / 31.692) / (1.797 / 34.858)
=0.20834911 / 0.22964599
=0.9073

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 - (12.278 + 13.326) / 33.335) / (1 - (15.518 + 12.54) / 35.035)
=0.2319184 / 0.19914371
=1.1646

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
=34.858 / 31.692
=1.0999

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))
=(2.468 / (2.468 + 12.54)) / (2.315 / (2.315 + 13.326))
=0.16444563 / 0.14800844
=1.1111

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)
=(7.925 / 34.858) / (7.145 / 31.692)
=0.22735097 / 0.22545122
=1.0084

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)
=((2.689 + 9.556) / 33.335) / ((2.623 + 11.493) / 35.035)
=0.36733163 / 0.40291137
=0.9117

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
=(-0.062 - -0.205 - 3.113) / 33.335
=-0.0891

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 -2.94 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.89721.57030.76130.79060.75540.81991.28981.11270.86580.7934
GMI 1.41681.27270.87060.67860.82660.83990.94170.97690.87350.9073
AQI 0.93150.93791.11451.10841.02681.09830.94920.98741.22271.1646
SGI 0.87521.01821.14461.04481.02150.99421.0411.12661.14141.0999
DEPI 0.88150.97870.97611.00061.04080.97751.05231.02981.12081.1111
SGAI 1.00610.7980.67160.75580.88950.98121.04170.99771.01541.0084
LVGI 1.53951.31581.02380.93650.97740.94481.09021.10180.92450.9117
TATA 0.00770.0132-0.1149-0.1427-0.1315-0.1711-0.0806-0.0757-0.1074-0.0891
M-score -1.73-1.83-3.08-3.36-3.35-3.48-2.64-2.66-2.92-2.94
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