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Travelzoo Inc (NAS:TZOO)
Beneish M-Score
-1.63 (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 -1.63 signals that the company is a manipulator.

TZOO' s Beneish M-Score Range Over the Past 10 Years
Min: -4.24   Max: 1.65
Current: -1.63

-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 -2.11.


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 * 1.3445+0.528 * 1.0138+0.404 * 0.9791+0.892 * 0.8446+0.115 * 0.9131
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1347+4.679 * 0.1795-0.327 * 1.4
=-1.63

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $17.8 Mil.
Revenue was 33.728 + 34.064 + 36.492 + 23.127 = $127.4 Mil.
Gross Profit was 28.986 + 29.159 + 32.258 + 19.755 = $110.2 Mil.
Total Current Assets was $58.7 Mil.
Total Assets was $71.0 Mil.
Property, Plant and Equipment(Net PPE) was $8.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.9 Mil.
Selling, General & Admin. Expense(SGA) was $106.8 Mil.
Total Current Liabilities was $36.8 Mil.
Long-Term Debt was $5.7 Mil.
Net Income was 8.857 + 1.326 + 1.909 + 3.204 = $15.3 Mil.
Non Operating Income was -0.202 + 0.021 + -0.087 + -0.439 = $-0.7 Mil.
Cash Flow from Operations was -1.723 + 0.372 + 2.426 + 2.187 = $3.3 Mil.
Accounts Receivable was $15.7 Mil.
Revenue was 36.307 + 36.883 + 40.195 + 37.475 = $150.9 Mil.
Gross Profit was 31.494 + 32.509 + 35.418 + 32.806 = $132.2 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 $2.9 Mil.
Selling, General & Admin. Expense(SGA) was $111.4 Mil.
Total Current Liabilities was $40.4 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)
=(17.822 / 127.411) / (15.695 / 150.86)
=0.13987803 / 0.10403686
=1.3445

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)
=(29.159 / 150.86) / (28.986 / 127.411)
=0.87648813 / 0.86458783
=1.0138

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 - (58.707 + 8.361) / 70.971) / (1 - (79.724 + 9.553) / 94.59)
=0.05499429 / 0.05616873
=0.9791

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
=127.411 / 150.86
=0.8446

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))
=(2.927 / (2.927 + 9.553)) / (2.89 / (2.89 + 8.361))
=0.23453526 / 0.25686606
=0.9131

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)
=(106.773 / 127.411) / (111.418 / 150.86)
=0.83802027 / 0.7385523
=1.1347

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)
=((5.658 + 36.81) / 70.971) / ((0 + 40.429) / 94.59)
=0.59838526 / 0.42741305
=1.4

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
=(15.296 - -0.707 - 3.262) / 70.971
=0.1795

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 -1.63 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.12320.58891.20751.11630.85110.98180.76321.00230.98061.1633
GMI 0.99660.99761.0121.00891.02631.00471.02771.01631.00651.0184
AQI 1.46190.93842.71033.07341.75681.23650.98921.02080.60171.0241
SGI 1.50751.36941.1351.02421.16281.20021.31531.01911.04670.8979
DEPI 1.16841.18491.82571.69250.42710.79720.94731.17081.39561.1136
SGAI 1.05840.80761.27811.12370.99270.91560.92731.0491.04131.0578
LVGI 1.80211.26181.71291.30130.74581.05381.62340.99681.37710.6527
TATA -0.0027-0.0116-0.0258-0.03640.003-0.1602-0.179-0.1891-0.19040.1638
M-score -1.99-2.64-1.78-1.72-2.12-3.00-3.44-3.32-3.59-1.52

Travelzoo Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.99230.90810.98060.9891.09831.10781.21071.2241.2281.3445
GMI 1.00381.00411.00651.01661.01581.01941.01951.01151.01591.0138
AQI 0.99640.74230.60170.8250.95891.4661.02410.73950.71840.9791
SGI 1.02271.05691.04671.01460.97330.95610.86270.850.85630.8446
DEPI 1.28171.24651.39561.48061.42631.32291.11360.89460.88990.9131
SGAI 1.13031.08751.04131.01610.99590.99751.091.12351.15491.1347
LVGI 0.97061.44751.37711.31221.11750.73670.65270.71790.81481.4
TATA -0.1669-0.3186-0.1904-0.1867-0.04980.21290.17890.1450.06070.1795
M-score -3.23-4.24-3.59-3.46-2.64-1.10-1.44-1.77-2.20-1.63
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