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Twin Disc Inc (NAS:TWIN)
Beneish M-Score
-2.56 (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 -2.56 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: -2.56

-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 -2.57.


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 * 1.0663+0.528 * 1.0957+0.404 * 1.3795+0.892 * 0.7744+0.115 * 1.0468
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1866+4.679 * -0.0299-0.327 * 0.9431
=-2.56

* 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 $33.6 Mil.
Revenue was 44.829 + 37.373 + 67.334 + 60.941 = $210.5 Mil.
Gross Profit was 11.606 + 8.19 + 19.534 + 19.006 = $58.3 Mil.
Total Current Assets was $143.0 Mil.
Total Assets was $225.7 Mil.
Property, Plant and Equipment(Net PPE) was $54.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.4 Mil.
Selling, General & Admin. Expense(SGA) was $61.7 Mil.
Total Current Liabilities was $57.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -2.301 + -4.323 + 0.437 + 2.946 = $-3.2 Mil.
Non Operating Income was -0.231 + 0.158 + -0.125 + 0.539 = $0.3 Mil.
Cash Flow from Operations was -2.077 + -2.372 + 1.56 + 6.056 = $3.2 Mil.
Accounts Receivable was $40.7 Mil.
Revenue was 72.691 + 64.824 + 73.566 + 60.705 = $271.8 Mil.
Gross Profit was 22.103 + 22.389 + 21.515 + 16.528 = $82.5 Mil.
Total Current Assets was $173.7 Mil.
Total Assets was $255.0 Mil.
Property, Plant and Equipment(Net PPE) was $57.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General & Admin. Expense(SGA) was $67.1 Mil.
Total Current Liabilities was $55.6 Mil.
Long-Term Debt was $13.2 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)
=(33.632 / 210.477) / (40.727 / 271.786)
=0.15978943 / 0.14984951
=1.0663

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)
=(8.19 / 271.786) / (11.606 / 210.477)
=0.30367642 / 0.27716092
=1.0957

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 - (142.961 + 53.97) / 225.685) / (1 - (173.739 + 57.745) / 255.039)
=0.12740767 / 0.09235842
=1.3795

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
=210.477 / 271.786
=0.7744

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))
=(10.63 / (10.63 + 57.745)) / (9.413 / (9.413 + 53.97))
=0.15546618 / 0.14850985
=1.0468

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)
=(61.679 / 210.477) / (67.121 / 271.786)
=0.2930439 / 0.24696268
=1.1866

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)
=((0.023 + 57.361) / 225.685) / ((13.172 + 55.589) / 255.039)
=0.2542659 / 0.26960975
=0.9431

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
=(-3.241 - 0.341 - 3.167) / 225.685
=-0.0299

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 -2.56 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 0.99730.97821.00291.02261.22220.9370.87671.15881.07310.9466
LVGI 1.16170.91450.99020.88870.86911.0160.8810.97420.88241.0016
TATA -0.01490.01620.0186-0.0017-0.13650.01950.0342-0.0741-0.0829-0.0271
M-score -2.34-2.31-2.32-2.49-3.19-2.23-2.27-3.03-3.06-2.57

Twin Disc Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.10280.86910.93841.1261.17541.04431.08340.88031.06631.3014
GMI 1.09391.00050.95830.95420.93220.91760.9371.04251.09571.2193
AQI 0.86610.83270.82090.87860.7840.79750.94751.3961.37951.6012
SGI 0.82290.87170.92510.92720.99261.02161.00710.90860.77440.702
DEPI 0.94680.95720.9860.98520.95790.95740.98471.01291.04681.0657
SGAI 1.15891.09061.07311.09481.00610.96780.94661.03231.18661.2983
LVGI 0.90010.93520.88241.01670.9850.9631.00160.92980.94310.835
TATA -0.1156-0.1113-0.0829-0.0392-0.0247-0.0461-0.0271-0.0518-0.0299-0.0137
M-score -3.09-3.30-3.06-2.71-2.56-2.75-2.57-2.71-2.56-2.16
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