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Trio-Tech International (AMEX:TRT)
Beneish M-Score
-2.87 (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 -2.87 suggests that the company is not a manipulator.

TRT' s 10-Year Beneish M-Score Range
Min: -4.07   Max: 21.11
Current: -2.87

-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 -2.55.


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 * 1.0381+0.528 * 0.8505+0.404 * 1.0258+0.892 * 0.9867+0.115 * 1.0079
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0458+4.679 * -0.0817-0.327 * 0.8776
=-2.87

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was 0.199 + 0.094 + -0.136 + 0.282 = $0.44 Mil.
Non Operating Income was -0.005 + 0.003 + 0.043 + -0.11 = $-0.07 Mil.
Cash Flow from Operations was 0.647 + 1.279 + 0.466 + 0.706 = $3.10 Mil.
Accounts Receivable was $8.16 Mil.
Revenue was 8.039 + 9.339 + 9.497 + 8.516 = $35.39 Mil.
Gross Profit was 1.967 + 1.987 + 2.091 + 1.697 = $7.74 Mil.
Total Current Assets was $14.16 Mil.
Total Assets was $34.20 Mil.
Property, Plant and Equipment(Net PPE) was $13.02 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.41 Mil.
Selling, General & Admin. Expense(SGA) was $7.59 Mil.
Total Current Liabilities was $10.59 Mil.
Long-Term Debt was $2.83 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)
=(8.361 / 34.92) / (8.163 / 35.391)
=0.23943299 / 0.23065186
=1.0381

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)
=(2.443 / 35.391) / (2.488 / 34.92)
=0.21875618 / 0.25721649
=0.8505

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 - (12.834 + 12.208) / 31.71) / (1 - (14.162 + 13.024) / 34.196)
=0.21028067 / 0.20499474
=1.0258

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
=34.92 / 35.391
=0.9867

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))
=(2.41 / (2.41 + 13.024)) / (2.238 / (2.238 + 12.208))
=0.15614876 / 0.15492178
=1.0079

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)
=(7.83 / 34.92) / (7.588 / 35.391)
=0.2242268 / 0.21440479
=1.0458

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)
=((2.392 + 8.527) / 31.71) / ((2.83 + 10.588) / 34.196)
=0.34433933 / 0.39238507
=0.8776

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
=(0.439 - -0.069 - 3.098) / 31.71
=-0.0817

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 -2.87 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.76130.79060.75540.81991.28981.11270.86580.79340.87681.0381
GMI 0.87060.67860.82660.83990.94170.97690.87350.90730.84720.8505
AQI 1.11451.10841.02681.09830.94920.98741.22271.16461.1671.0258
SGI 1.14461.04481.02150.99421.0411.12661.14141.09991.01790.9867
DEPI 0.97611.00061.04080.97751.05231.02981.12081.11111.01111.0079
SGAI 0.67160.75580.88950.98121.04170.99771.01541.00841.02941.0458
LVGI 1.02380.93650.97740.94481.09021.10180.92450.91170.90980.8776
TATA -0.1149-0.1427-0.1315-0.1711-0.0806-0.0757-0.1074-0.0891-0.0916-0.0817
M-score -3.08-3.36-3.35-3.48-2.64-2.66-2.92-2.94-2.99-2.87
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