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Twin Disc Inc (NAS:TWIN)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

TWIN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.3   Max: -1.93
Current: -2.16

-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 * 1.3014+0.528 * 1.2193+0.404 * 1.6012+0.892 * 0.702+0.115 * 1.0657
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2983+4.679 * -0.0137-0.327 * 0.835
=-2.16

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $32.6 Mil.
Revenue was 41.434 + 44.829 + 37.373 + 67.334 = $191.0 Mil.
Gross Profit was 9.618 + 11.606 + 8.19 + 19.534 = $48.9 Mil.
Total Current Assets was $133.2 Mil.
Total Assets was $218.4 Mil.
Property, Plant and Equipment(Net PPE) was $53.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.2 Mil.
Selling, General & Admin. Expense(SGA) was $60.1 Mil.
Total Current Liabilities was $40.9 Mil.
Long-Term Debt was $8.2 Mil.
Net Income was -0.963 + -2.301 + -4.323 + 0.437 = $-7.2 Mil.
Non Operating Income was -0.187 + -0.231 + 0.158 + -0.125 = $-0.4 Mil.
Cash Flow from Operations was -0.886 + -2.077 + -2.372 + 1.56 = $-3.8 Mil.
Accounts Receivable was $35.7 Mil.
Revenue was 60.941 + 72.691 + 64.824 + 73.566 = $272.0 Mil.
Gross Profit was 19.006 + 22.103 + 22.389 + 21.515 = $85.0 Mil.
Total Current Assets was $168.0 Mil.
Total Assets was $246.4 Mil.
Property, Plant and Equipment(Net PPE) was $55.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.4 Mil.
Selling, General & Admin. Expense(SGA) was $65.9 Mil.
Total Current Liabilities was $57.6 Mil.
Long-Term Debt was $8.8 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)
=(32.644 / 190.97) / (35.729 / 272.022)
=0.17093784 / 0.13134599
=1.3014

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)
=(85.013 / 272.022) / (48.948 / 190.97)
=0.31252252 / 0.25631251
=1.2193

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 - (133.194 + 53.178) / 218.41) / (1 - (168.014 + 55.791) / 246.376)
=0.14668742 / 0.09161201
=1.6012

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
=190.97 / 272.022
=0.702

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))
=(10.356 / (10.356 + 55.791)) / (9.158 / (9.158 + 53.178))
=0.15656039 / 0.1469135
=1.0657

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)
=(60.082 / 190.97) / (65.92 / 272.022)
=0.31461486 / 0.24233334
=1.2983

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)
=((8.227 + 40.931) / 218.41) / ((8.829 + 57.582) / 246.376)
=0.22507211 / 0.26955142
=0.835

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
=(-7.15 - -0.385 - -3.775) / 218.41
=-0.0137

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 -2.16 signals that the company is likely to 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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