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Travelzoo, Inc. (NAS:TZOO)
Beneish M-Score
-3.77 (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.

Travelzoo, Inc. has a M-score of -3.63 suggests that the company is not a manipulator.

TZOO' s 10-Year Beneish M-Score Range
Min: -3.77   Max: -1.67
Current: -3.77

-3.77
-1.67

During the past 13 years, the highest Beneish M-Score of Travelzoo, Inc. was -1.67. The lowest was -3.77. And the median was -2.33.


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 Travelzoo, 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 * 0.8082+0.528 * 1.0166+0.404 * 0.825+0.892 * 1.0146+0.115 * 1.4806
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0161+4.679 * -0.1867-0.327 * 1.3122
=-3.63

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $16.7 Mil.
Revenue was 40.195 + 37.475 + 37.256 + 41.327 = $156.3 Mil.
Gross Profit was 35.418 + 32.806 + 32.934 + 36.902 = $138.1 Mil.
Total Current Assets was $81.8 Mil.
Total Assets was $97.2 Mil.
Property, Plant and Equipment(Net PPE) was $10.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.0 Mil.
Selling, General & Admin. Expense(SGA) was $114.8 Mil.
Total Current Liabilities was $53.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 4.638 + 3.23 + -19.036 + 5.2 = $-6.0 Mil.
Non Operating Income was 0.122 + -0.369 + 0.224 + 0.112 = $0.1 Mil.
Cash Flow from Operations was 1.751 + -1.813 + 2.187 + 9.978 = $12.1 Mil.
Accounts Receivable was $20.4 Mil.
Revenue was 42.177 + 37.028 + 35.447 + 39.36 = $154.0 Mil.
Gross Profit was 38.192 + 32.955 + 31.458 + 35.73 = $138.3 Mil.
Total Current Assets was $90.5 Mil.
Total Assets was $102.4 Mil.
Property, Plant and Equipment(Net PPE) was $5.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.6 Mil.
Selling, General & Admin. Expense(SGA) was $111.4 Mil.
Total Current Liabilities was $42.7 Mil.
Long-Term Debt was $0.0 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)
=(16.743 / 156.253) / (20.42 / 154.012)
=0.10715314 / 0.13258707
=0.8082

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)
=(32.806 / 154.012) / (35.418 / 156.253)
=0.89820923 / 0.88356704
=1.0166

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 - (81.846 + 10.305) / 97.243) / (1 - (90.538 + 5.316) / 102.35)
=0.05236367 / 0.06346849
=0.825

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
=156.253 / 154.012
=1.0146

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))
=(2.628 / (2.628 + 5.316)) / (2.965 / (2.965 + 10.305))
=0.33081571 / 0.22343632
=1.4806

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)
=(114.82 / 156.253) / (111.381 / 154.012)
=0.73483389 / 0.72319689
=1.0161

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 + 53.216) / 97.243) / ((0 + 42.684) / 102.35)
=0.54724762 / 0.41703957
=1.3122

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
=(-5.968 - 0.089 - 12.103) / 97.243
=-0.1867

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.

Travelzoo, Inc. has a M-score of -3.63 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.

Travelzoo, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.20071.12320.58891.32851.16671.13780.65130.95161.17470.7829
GMI 0.99840.99660.99761.0121.00891.02631.00471.02771.01631.0065
AQI 0.09141.46190.93842.71033.07341.75681.23650.98921.02080.6017
SGI 1.8721.50751.36941.1351.02421.16281.20021.31531.01911.0467
DEPI 0.83281.16841.18491.82571.69250.42710.79720.94731.17081.3956
SGAI 0.84651.05840.80761.27811.12370.99270.91560.92731.0491.0413
LVGI 0.16141.80211.26181.71291.30130.74581.05381.62340.99681.3771
TATA 0.0318-0.0027-0.0116-0.0258-0.03640.003-0.1602-0.179-0.1891-0.1904
M-score -1.46-1.99-2.64-1.67-1.67-1.86-3.30-3.27-3.16-3.77

Travelzoo, Inc. Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.95160.85460.80561.45451.17471.14611.02880.71720.78290.8082
GMI 1.02771.03611.0341.02141.01631.00331.00381.00411.00651.0166
AQI 0.98920.92920.78710.63471.02081.03260.99640.74230.60170.825
SGI 1.31531.24331.1671.0541.01911.02191.02271.05691.04671.0146
DEPI 0.94730.93791.03551.11711.17081.28291.28171.24651.39561.4806
SGAI 0.92730.95970.93491.00191.0491.07681.13031.08751.04131.0161
LVGI 1.62340.82290.97020.81620.99680.89570.97061.44751.37711.3122
TATA -0.1790.0797-0.1124-0.1028-0.1891-0.1299-0.1669-0.3186-0.1904-0.1867
M-score -3.27-1.98-3.08-2.56-3.16-2.87-3.19-4.42-3.77-3.63
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