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Twin Disc Inc (NAS:TWIN)
Beneish M-Score
-2.71 (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.

Twin Disc Inc has a M-score of -2.71 suggests that the company is not a manipulator.

TWIN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.3   Max: -1.93
Current: -2.71

-3.3
-1.93

During the past 13 years, the highest Beneish M-Score of Twin Disc Inc was -1.93. The lowest was -3.30. And the median was -2.61.


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 Twin Disc Inc 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 * 0.8803+0.528 * 1.0425+0.404 * 1.396+0.892 * 0.9086+0.115 * 1.0129
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0323+4.679 * -0.0518-0.327 * 0.9298
=-2.71

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $31.3 Mil.
Revenue was 37.373 + 67.334 + 60.941 + 72.691 = $238.3 Mil.
Gross Profit was 8.19 + 19.534 + 19.006 + 22.103 = $68.8 Mil.
Total Current Assets was $148.4 Mil.
Total Assets was $235.8 Mil.
Property, Plant and Equipment(Net PPE) was $55.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.8 Mil.
Selling, General & Admin. Expense(SGA) was $63.6 Mil.
Total Current Liabilities was $50.9 Mil.
Long-Term Debt was $10.7 Mil.
Net Income was -4.323 + 0.437 + 2.946 + 3.747 = $2.8 Mil.
Non Operating Income was 0.158 + -0.125 + 0.539 + 0.142 = $0.7 Mil.
Cash Flow from Operations was -2.372 + 1.56 + 6.056 + 9.065 = $14.3 Mil.
Accounts Receivable was $39.1 Mil.
Revenue was 64.824 + 73.566 + 60.705 + 63.212 = $262.3 Mil.
Gross Profit was 22.389 + 21.515 + 16.528 + 18.544 = $79.0 Mil.
Total Current Assets was $178.9 Mil.
Total Assets was $263.6 Mil.
Property, Plant and Equipment(Net PPE) was $59.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General & Admin. Expense(SGA) was $67.8 Mil.
Total Current Liabilities was $54.1 Mil.
Long-Term Debt was $20.0 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)
=(31.29 / 238.339) / (39.12 / 262.307)
=0.13128359 / 0.14913822
=0.8803

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)
=(19.534 / 262.307) / (8.19 / 238.339)
=0.30108232 / 0.28880292
=1.0425

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 - (148.41 + 55.366) / 235.792) / (1 - (178.937 + 58.98) / 263.551)
=0.13578069 / 0.09726391
=1.396

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
=238.339 / 262.307
=0.9086

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))
=(10.618 / (10.618 + 58.98)) / (9.818 / (9.818 + 55.366))
=0.15256186 / 0.15061978
=1.0129

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)
=(63.594 / 238.339) / (67.799 / 262.307)
=0.26682163 / 0.25847194
=1.0323

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)
=((10.696 + 50.935) / 235.792) / ((19.998 + 54.086) / 263.551)
=0.26137867 / 0.28109929
=0.9298

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
=(2.807 - 0.714 - 14.309) / 235.792
=-0.0518

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.

Twin Disc Inc has a M-score of -2.71 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.

Twin Disc Inc Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 1.33120.86721.02180.88571.04721.03970.9070.9110.93841.0834
GMI 0.85960.94251.02621.14761.03670.7661.0151.21840.95830.937
AQI 0.79410.86190.97021.28591.18790.75630.85170.91540.82090.9475
SGI 1.11361.30381.04570.89120.76971.36421.14650.80160.92511.0071
DEPI 1.11120.9811.08790.80460.89661.10240.9380.94150.9860.9847
SGAI 0.99730.97821.00291.02261.22220.94030.87371.15881.07310.9466
LVGI 1.16170.91450.99020.88870.86911.0160.8810.97420.88241.0016
TATA -0.01490.01620.0186-0.0022-0.13650.01680.0363-0.0741-0.0829-0.0271
M-score -2.34-2.31-2.32-2.49-3.19-2.25-2.26-3.03-3.06-2.57

Twin Disc Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.96521.10280.86910.93841.1261.17541.04431.08340.88031.0663
GMI 1.11811.09391.00050.95830.95420.93220.91760.9371.04251.0957
AQI 0.86410.86610.83270.82090.87860.7840.79750.94751.3961.3795
SGI 0.8240.82290.87170.92510.92720.99261.02161.00710.90860.7744
DEPI 0.94520.94680.95720.9860.98520.95790.95740.98471.01291.0468
SGAI 1.09841.15891.09061.07311.09481.00610.96780.94661.03231.1866
LVGI 0.87560.90010.93520.88241.01670.9850.9631.00160.92980.9431
TATA -0.1058-0.1156-0.1113-0.0829-0.0392-0.0247-0.0461-0.0271-0.0518-0.0299
M-score -3.14-3.09-3.30-3.06-2.71-2.56-2.75-2.57-2.71-2.56
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