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Travelzoo Inc (NAS:TZOO)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

TZOO' s 10-Year Beneish M-Score Range
Min: -4.42   Max: 1.65
Current: -2.71

-4.42
1.65

During the past 13 years, the highest Beneish M-Score of Travelzoo Inc was 1.65. The lowest was -4.42. And the median was -2.48.


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 * 1.0214+0.528 * 1.0158+0.404 * 0.9589+0.892 * 0.9733+0.115 * 1.4263
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9959+4.679 * -0.0498-0.327 * 1.1175
=-2.71

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $18.5 Mil.
Revenue was 36.883 + 40.195 + 37.475 + 37.256 = $151.8 Mil.
Gross Profit was 32.509 + 35.418 + 32.806 + 32.934 = $133.7 Mil.
Total Current Assets was $82.8 Mil.
Total Assets was $97.9 Mil.
Property, Plant and Equipment(Net PPE) was $9.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.8 Mil.
Selling, General & Admin. Expense(SGA) was $111.6 Mil.
Total Current Liabilities was $44.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 7.924 + 4.638 + 3.23 + -19.036 = $-3.2 Mil.
Non Operating Income was 0.056 + 0.122 + -0.369 + 0.224 = $0.0 Mil.
Cash Flow from Operations was -0.529 + 1.751 + -1.813 + 2.187 = $1.6 Mil.
Accounts Receivable was $18.7 Mil.
Revenue was 41.327 + 42.177 + 37.028 + 35.447 = $156.0 Mil.
Gross Profit was 36.902 + 38.192 + 32.955 + 31.458 = $139.5 Mil.
Total Current Assets was $98.1 Mil.
Total Assets was $110.3 Mil.
Property, Plant and Equipment(Net PPE) was $5.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.8 Mil.
Selling, General & Admin. Expense(SGA) was $115.1 Mil.
Total Current Liabilities was $45.3 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)
=(18.544 / 151.809) / (18.654 / 155.979)
=0.1221535 / 0.11959302
=1.0214

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)
=(35.418 / 155.979) / (32.509 / 151.809)
=0.89439604 / 0.88049457
=1.0158

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 - (82.814 + 9.668) / 97.917) / (1 - (98.122 + 5.811) / 110.319)
=0.05550619 / 0.05788667
=0.9589

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
=151.809 / 155.979
=0.9733

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))
=(2.79 / (2.79 + 5.811)) / (2.846 / (2.846 + 9.668))
=0.32438089 / 0.22742528
=1.4263

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)
=(111.587 / 151.809) / (115.125 / 155.979)
=0.73504865 / 0.73808013
=0.9959

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 + 44.907) / 97.917) / ((0 + 45.274) / 110.319)
=0.45862312 / 0.41039168
=1.1175

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
=(-3.244 - 0.033 - 1.596) / 97.917
=-0.0498

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 -2.71 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 1.20071.12320.58891.32851.02361.29690.65130.95161.17470.7829
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 -1.46-2.00-2.64-1.67-1.74-1.74-3.30-3.30-3.13-3.77

Travelzoo Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.85460.80561.45451.17471.14611.02880.71720.78290.80821.0214
GMI 1.03291.0381.02511.01981.00661.00381.00411.00651.01661.0158
AQI 0.92920.78710.63471.02081.03260.99640.74230.60170.8250.9589
SGI 1.24331.1671.0541.01911.02191.02271.05691.04671.01460.9733
DEPI 0.93791.03551.11711.17081.28291.28171.24651.39561.48061.4263
SGAI 0.77980.76370.82620.87081.07211.13031.08751.04131.01610.9959
LVGI 0.82290.97020.81620.99680.89570.97061.44751.37711.31221.1175
TATA 0.0793-0.1132-0.104-0.1891-0.1299-0.167-0.3187-0.1904-0.1867-0.0498
M-score -1.95-3.05-2.53-3.13-2.86-3.19-4.42-3.77-3.63-2.71
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