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Travelzoo Inc (NAS:TZOO)
Beneish M-Score
-1.17 (As of Today)

Warning Sign:

Beneish M-Score -1.17 higher than -2.22, which implies that it might have manipulated its financial results.

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 -1.17 signals that the company is a manipulator.

TZOO' s 10-Year Beneish M-Score Range
Min: -4.24   Max: 1.65
Current: -1.17

-4.24
1.65

During the past 13 years, the highest Beneish M-Score of Travelzoo Inc was 1.65. The lowest was -4.24. And the median was -2.43.


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 * 1.1288+0.528 * 1.0195+0.404 * 1.466+0.892 * 0.9383+0.115 * 1.3579
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0146+4.679 * 0.1969-0.327 * 0.7367
=-1.17

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $15.7 Mil.
Revenue was 33.5 + 36.883 + 40.195 + 37.475 = $148.1 Mil.
Gross Profit was 29.025 + 32.509 + 35.418 + 32.806 = $129.8 Mil.
Total Current Assets was $79.7 Mil.
Total Assets was $94.6 Mil.
Property, Plant and Equipment(Net PPE) was $9.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.8 Mil.
Selling, General & Admin. Expense(SGA) was $111.2 Mil.
Total Current Liabilities was $40.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 2.536 + 7.924 + 4.638 + 3.23 = $18.3 Mil.
Non Operating Income was 0.01 + 0.056 + 0.122 + -0.369 = $-0.2 Mil.
Cash Flow from Operations was 0.476 + -0.529 + 1.751 + -1.813 = $-0.1 Mil.
Accounts Receivable was $14.8 Mil.
Revenue was 37.256 + 41.327 + 42.177 + 37.028 = $157.8 Mil.
Gross Profit was 32.934 + 36.902 + 38.192 + 32.955 = $141.0 Mil.
Total Current Assets was $103.2 Mil.
Total Assets was $114.0 Mil.
Property, Plant and Equipment(Net PPE) was $6.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.9 Mil.
Selling, General & Admin. Expense(SGA) was $116.8 Mil.
Total Current Liabilities was $66.1 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)
=(15.695 / 148.053) / (14.818 / 157.788)
=0.10600933 / 0.09391082
=1.1288

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)
=(32.509 / 157.788) / (29.025 / 148.053)
=0.89349634 / 0.87642939
=1.0195

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 - (79.724 + 9.553) / 94.59) / (1 - (103.213 + 6.376) / 113.955)
=0.05616873 / 0.03831337
=1.466

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
=148.053 / 157.788
=0.9383

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))
=(2.868 / (2.868 + 6.376)) / (2.829 / (2.829 + 9.553))
=0.3102553 / 0.22847682
=1.3579

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)
=(111.219 / 148.053) / (116.821 / 157.788)
=0.75121072 / 0.74036682
=1.0146

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 + 40.429) / 94.59) / ((0 + 66.118) / 113.955)
=0.42741305 / 0.58021149
=0.7367

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
=(18.328 - -0.181 - -0.115) / 94.59
=0.1969

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 -1.17 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.

Travelzoo Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.20071.12320.58891.20751.12620.84360.98180.76321.00230.9806
GMI 0.99840.99660.99761.0121.01061.02461.00471.02771.01631.0065
AQI 0.09141.45570.94232.71033.27061.6511.23650.98921.02080.6017
SGI 1.8721.50751.36941.1351.03161.15441.20021.31531.01911.0467
DEPI 0.83281.16841.18491.82571.74890.41330.79720.94731.17081.3956
SGAI 0.84651.05840.80761.27811.2990.85870.91561.11270.87421.0413
LVGI 0.16141.80211.26181.71291.30130.74581.05381.62340.99681.3771
TATA 0.0318-0.0027-0.0116-0.0258-0.03650.003-0.1602-0.179-0.1892-0.1904
M-score -1.46-2.00-2.64-1.78-1.65-2.16-3.00-3.47-3.29-3.59

Travelzoo Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.81931.04151.00231.02190.99230.90810.98060.9891.09831.1288
GMI 1.0381.02511.01981.00661.00381.00411.00651.01661.01581.0195
AQI 0.78710.63471.02081.03260.99640.74230.60170.8250.95891.466
SGI 1.1671.0541.01911.02191.02271.05691.04671.01460.97330.9383
DEPI 1.03551.11711.17081.28291.28171.24651.39561.48061.42631.3579
SGAI 0.76370.82620.87081.07211.13031.08751.04131.01610.99591.0146
LVGI 0.97020.81620.99680.89570.97061.44751.37711.31221.11750.7367
TATA -0.1132-0.104-0.1891-0.1299-0.167-0.3187-0.1904-0.1867-0.04980.1969
M-score -3.04-2.91-3.28-2.98-3.23-4.24-3.59-3.46-2.64-1.17
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