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Twin Disc Inc (NAS:TWIN)
Beneish M-Score
-2.65 (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 -2.65 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: -2.65

-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 -2.59.


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 * 1.1909+0.528 * 1.1443+0.404 * 1.3383+0.892 * 0.6912+0.115 * 1.0396
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2364+4.679 * -0.0653-0.327 * 0.8178
=-2.65

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $25.8 Mil.
Revenue was 35.835 + 42.647 + 41.434 + 44.829 = $164.7 Mil.
Gross Profit was 9.173 + 11.182 + 9.618 + 11.606 = $41.6 Mil.
Total Current Assets was $123.7 Mil.
Total Assets was $212.8 Mil.
Property, Plant and Equipment(Net PPE) was $50.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.5 Mil.
Selling, General & Admin. Expense(SGA) was $54.3 Mil.
Total Current Liabilities was $35.8 Mil.
Long-Term Debt was $9.7 Mil.
Net Income was -2.696 + -5.518 + -0.963 + -2.301 = $-11.5 Mil.
Non Operating Income was -0.11 + -0.16 + -0.187 + -0.231 = $-0.7 Mil.
Cash Flow from Operations was -2.661 + 8.726 + -0.886 + -2.077 = $3.1 Mil.
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.



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)
=(25.758 / 164.745) / (31.29 / 238.339)
=0.15635072 / 0.13128359
=1.1909

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)
=(68.833 / 238.339) / (41.579 / 164.745)
=0.28880292 / 0.25238399
=1.1443

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 - (123.679 + 50.416) / 212.756) / (1 - (148.41 + 55.366) / 235.792)
=0.1817152 / 0.13578069
=1.3383

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
=164.745 / 238.339
=0.6912

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))
=(9.818 / (9.818 + 55.366)) / (8.542 / (8.542 + 50.416))
=0.15061978 / 0.1448828
=1.0396

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)
=(54.347 / 164.745) / (63.594 / 238.339)
=0.32988558 / 0.26682163
=1.2364

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)
=((9.694 + 35.786) / 212.756) / ((10.696 + 50.935) / 235.792)
=0.213766 / 0.26137867
=0.8178

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
=(-11.478 - -0.688 - 3.102) / 212.756
=-0.0653

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 -2.65 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 local exchange's currency.

Twin Disc Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.86721.02180.88571.04721.03970.9070.9110.93841.08340.9238
GMI 0.94251.02621.14761.03670.7661.0151.21840.95830.9371.2796
AQI 0.86190.97021.19051.28310.75630.85170.91540.82090.94751.8418
SGI 1.30381.04570.89120.76971.36421.14650.80160.92511.00710.6256
DEPI 0.9811.08790.80460.89661.10240.9380.94150.9860.98471.0437
SGAI 0.97821.00291.02261.22220.9370.87671.15881.07310.94661.4206
LVGI 0.91450.99020.90250.85581.0160.8810.97420.88241.00160.7748
TATA 0.01620.0186-0.0018-0.13650.01950.0342-0.0741-0.0829-0.0271-0.0751
M-score -2.31-2.32-2.53-3.15-2.23-2.27-3.03-3.06-2.57-2.74

Twin Disc Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.93841.1261.17541.04431.08340.88031.06631.30140.92381.1909
GMI 0.95830.95420.93220.91760.9371.04251.09571.21931.27961.1443
AQI 0.82090.87860.7840.79750.94751.3961.37951.60121.84181.3383
SGI 0.92510.92720.99261.02161.00710.90860.77440.7020.62560.6912
DEPI 0.9860.98520.95790.95740.98471.01291.04681.06571.04371.0396
SGAI 1.07311.09481.00610.96780.94661.03231.18661.29831.42051.2364
LVGI 0.88241.01670.9850.9631.00160.92980.94310.8350.77480.8178
TATA -0.0829-0.0392-0.0247-0.0461-0.0271-0.0518-0.0299-0.0137-0.0751-0.0653
M-score -3.06-2.71-2.56-2.75-2.57-2.71-2.56-2.16-2.74-2.65
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