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Trio-Tech International (AMEX:TRT)
Beneish M-Score
-3.17 (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 -3.17 suggests that the company is not a manipulator.

TRT' s Beneish M-Score Range Over the Past 10 Years
Min: -4.07   Max: 21.11
Current: -3.17

-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 -2.64.


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 * 0.9188+0.528 * 0.9098+0.404 * 0.8053+0.892 * 0.9654+0.115 * 0.9897
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9889+4.679 * -0.1039-0.327 * 0.9171
=-3.17

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $7.30 Mil.
Revenue was 8.354 + 7.93 + 8.399 + 8.543 = $33.23 Mil.
Gross Profit was 2.115 + 2.178 + 2.197 + 2.488 = $8.98 Mil.
Total Current Assets was $14.13 Mil.
Total Assets was $30.49 Mil.
Property, Plant and Equipment(Net PPE) was $10.83 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.99 Mil.
Selling, General & Admin. Expense(SGA) was $7.40 Mil.
Total Current Liabilities was $7.92 Mil.
Long-Term Debt was $2.30 Mil.
Net Income was 0.19 + 0.259 + 0.352 + 0.199 = $1.00 Mil.
Non Operating Income was 0.014 + 0.205 + 0.312 + -0.005 = $0.53 Mil.
Cash Flow from Operations was 0.661 + 0.688 + 1.698 + 0.595 = $3.64 Mil.
Accounts Receivable was $8.23 Mil.
Revenue was 8.897 + 8.093 + 9.387 + 8.039 = $34.42 Mil.
Gross Profit was 2.443 + 1.797 + 2.254 + 1.967 = $8.46 Mil.
Total Current Assets was $12.86 Mil.
Total Assets was $32.87 Mil.
Property, Plant and Equipment(Net PPE) was $12.60 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.29 Mil.
Selling, General & Admin. Expense(SGA) was $7.76 Mil.
Total Current Liabilities was $9.54 Mil.
Long-Term Debt was $2.47 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)
=(7.302 / 33.226) / (8.232 / 34.416)
=0.21976765 / 0.23919107
=0.9188

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)
=(2.178 / 34.416) / (2.115 / 33.226)
=0.24584496 / 0.27021008
=0.9098

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 - (14.128 + 10.825) / 30.49) / (1 - (12.862 + 12.596) / 32.87)
=0.18160052 / 0.22549437
=0.8053

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
=33.226 / 34.416
=0.9654

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))
=(2.285 / (2.285 + 12.596)) / (1.988 / (1.988 + 10.825))
=0.15355151 / 0.15515492
=0.9897

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)
=(7.404 / 33.226) / (7.755 / 34.416)
=0.22283754 / 0.22533124
=0.9889

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)
=((2.296 + 7.918) / 30.49) / ((2.469 + 9.537) / 32.87)
=0.33499508 / 0.36525707
=0.9171

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
=(1 - 0.526 - 3.642) / 30.49
=-0.1039

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 -3.17 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 1.75590.54150.89011.41131.65140.5831.89720.75540.86580.9757
GMI 0.88531.05371.16450.91241.28110.81181.41680.82660.87350.8701
AQI 0.57191.22664.5832.54240.57161.43790.93151.02681.22270.8285
SGI 1.16111.60660.86450.49471.84690.96230.87521.02151.14140.9357
DEPI 0.87850.71871.1071.02451.61491.01520.88151.04081.12080.9547
SGAI 1.13670.65331.28321.45390.61311.31221.00610.88981.01510.9987
LVGI 0.89280.81161.02840.61972.51220.6751.53950.97740.92450.8742
TATA 0.3196-0.1413-0.0778-0.1193-0.005-0.15830.0077-0.1315-0.1134-0.1225
M-score -0.38-2.81-1.58-2.48-1.53-3.51-1.73-3.35-2.95-3.23

Trio-Tech International Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.81991.28981.11270.86580.79340.87681.03810.97571.00520.9188
GMI 0.83990.94170.97690.87350.90730.84720.85050.87010.83330.9098
AQI 1.09830.94920.98741.22271.16461.1671.02580.82850.79690.8053
SGI 0.99421.0411.12661.14141.09991.01790.98670.93570.96880.9654
DEPI 0.97751.05231.02981.12081.11111.01111.00790.95470.93620.9897
SGAI 0.98121.04170.99771.01541.00841.02941.04581.00020.98210.9889
LVGI 0.94481.09021.10180.92450.91170.90980.87760.87420.93580.9171
TATA -0.1711-0.0806-0.0757-0.1133-0.0936-0.0978-0.0864-0.1212-0.1287-0.1039
M-score -3.48-2.64-2.66-2.95-2.96-3.02-2.90-3.23-3.26-3.17
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