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Trio-Tech International (AMEX:TRT)
Beneish M-Score
-2.63 (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 -2.63 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: -2.63

-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 -2.66.


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 * 1.0092+0.528 * 1.093+0.404 * 0.9502+0.892 * 1.0511+0.115 * 1.1175
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.911+4.679 * -0.0602-0.327 * 0.9508
=-2.63

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $8.11 Mil.
Revenue was 8.971 + 8.815 + 9.355 + 8.354 = $35.50 Mil.
Gross Profit was 2.358 + 2.344 + 2.132 + 2.115 = $8.95 Mil.
Total Current Assets was $14.96 Mil.
Total Assets was $31.53 Mil.
Property, Plant and Equipment(Net PPE) was $11.03 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.82 Mil.
Selling, General & Admin. Expense(SGA) was $7.22 Mil.
Total Current Liabilities was $8.25 Mil.
Long-Term Debt was $2.06 Mil.
Net Income was 0.303 + 0.18 + 0.15 + 0.19 = $0.82 Mil.
Non Operating Income was 0.106 + -0.086 + -0.105 + 0.014 = $-0.07 Mil.
Cash Flow from Operations was 2.466 + -0.332 + -0.003 + 0.661 = $2.79 Mil.
Accounts Receivable was $7.64 Mil.
Revenue was 7.93 + 8.399 + 8.543 + 8.897 = $33.77 Mil.
Gross Profit was 2.178 + 2.197 + 2.488 + 2.443 = $9.31 Mil.
Total Current Assets was $13.66 Mil.
Total Assets was $30.48 Mil.
Property, Plant and Equipment(Net PPE) was $11.19 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.10 Mil.
Selling, General & Admin. Expense(SGA) was $7.54 Mil.
Total Current Liabilities was $8.27 Mil.
Long-Term Debt was $2.20 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)
=(8.109 / 35.495) / (7.644 / 33.769)
=0.22845471 / 0.22636146
=1.0092

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)
=(9.306 / 33.769) / (8.949 / 35.495)
=0.27557819 / 0.25212002
=1.093

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 - (14.962 + 11.032) / 31.531) / (1 - (13.659 + 11.188) / 30.48)
=0.17560496 / 0.18480971
=0.9502

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
=35.495 / 33.769
=1.0511

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))
=(2.101 / (2.101 + 11.188)) / (1.818 / (1.818 + 11.032))
=0.15810068 / 0.1414786
=1.1175

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)
=(7.22 / 35.495) / (7.54 / 33.769)
=0.20340893 / 0.22328171
=0.911

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)
=((2.06 + 8.246) / 31.531) / ((2.204 + 8.274) / 30.48)
=0.32685294 / 0.3437664
=0.9508

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
=(0.823 - -0.071 - 2.792) / 31.531
=-0.0602

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 -2.63 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 local exchange's currency.

Trio-Tech International Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.54150.89011.41131.65140.5831.89720.75540.86580.97571.1038
GMI 1.05371.16450.91241.28110.81181.41680.82660.87350.87011.0334
AQI 1.22664.5832.54240.57161.43790.93151.02681.22270.82850.9342
SGI 1.60660.86450.49471.84690.96230.87521.02151.14140.93571.0154
DEPI 0.71871.1071.02451.61491.01520.88151.04081.12080.95471.0832
SGAI 0.65331.28321.45390.61311.31221.00610.88981.01510.99870.9276
LVGI 0.81161.02840.61972.51220.6751.53950.97740.92450.87421.0075
TATA -0.1466-0.0778-0.1193-0.005-0.15830.0077-0.1315-0.1075-0.1225-0.0082
M-score -2.84-1.58-2.48-1.53-3.51-1.73-3.35-2.92-3.23-2.40

Trio-Tech International Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.86580.79340.87681.03810.97571.00520.91881.10061.10381.0092
GMI 0.87350.90730.84720.85050.87010.83330.90981.01541.03341.093
AQI 1.22271.16461.1671.02580.82850.79690.80530.8890.93420.9502
SGI 1.14141.09991.01790.98670.93570.96880.96540.97471.01541.0511
DEPI 1.12081.11111.01111.00790.95470.93620.98971.09071.08321.1175
SGAI 1.01541.00841.02941.04581.00020.98210.98890.94210.92620.911
LVGI 0.92450.91170.90980.87760.87420.93580.91710.99441.00750.9508
TATA -0.1074-0.0876-0.0916-0.0801-0.1233-0.1309-0.1061-0.0806-0.0082-0.0602
M-score -2.92-2.93-2.99-2.87-3.24-3.27-3.18-2.80-2.40-2.63
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