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United Rentals Inc (NYSE:URI)
Beneish M-Score
-2.88 (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.

United Rentals Inc has a M-score of -2.88 suggests that the company is not a manipulator.

URI' s 10-Year Beneish M-Score Range
Min: -4.83   Max: -0.73
Current: -2.88

-4.83
-0.73

During the past 13 years, the highest Beneish M-Score of United Rentals Inc was -0.73. The lowest was -4.83. And the median was -2.88.


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 United Rentals 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 * 1.0266+0.528 * 0.9371+0.404 * 1.0073+0.892 * 1.0947+0.115 * 1.0499
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9597+4.679 * -0.1042-0.327 * 0.9975
=-2.88

* 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 $844 Mil.
Revenue was 1399 + 1178 + 1338 + 1311 = $5,226 Mil.
Gross Profit was 589 + 448 + 567 + 564 = $2,168 Mil.
Total Current Assets was $1,396 Mil.
Total Assets was $12,467 Mil.
Property, Plant and Equipment(Net PPE) was $6,452 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,138 Mil.
Selling, General & Admin. Expense(SGA) was $685 Mil.
Total Current Liabilities was $1,746 Mil.
Long-Term Debt was $7,394 Mil.
Net Income was 94 + 60 + 140 + 143 = $437 Mil.
Non Operating Income was 4 + 1 + 2 + 2 = $9 Mil.
Cash Flow from Operations was 546 + 508 + 436 + 237 = $1,727 Mil.
Accounts Receivable was $751 Mil.
Revenue was 1206 + 1100 + 1249 + 1219 = $4,774 Mil.
Gross Profit was 471 + 385 + 495 + 505 = $1,856 Mil.
Total Current Assets was $1,363 Mil.
Total Assets was $11,326 Mil.
Property, Plant and Equipment(Net PPE) was $5,797 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,083 Mil.
Selling, General & Admin. Expense(SGA) was $652 Mil.
Total Current Liabilities was $1,592 Mil.
Long-Term Debt was $6,732 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)
=(844 / 5226) / (751 / 4774)
=0.16150019 / 0.15731043
=1.0266

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)
=(448 / 4774) / (589 / 5226)
=0.38877252 / 0.41484883
=0.9371

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 - (1396 + 6452) / 12467) / (1 - (1363 + 5797) / 11326)
=0.37049812 / 0.36782624
=1.0073

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
=5226 / 4774
=1.0947

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))
=(1083 / (1083 + 5797)) / (1138 / (1138 + 6452))
=0.15741279 / 0.14993412
=1.0499

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)
=(685 / 5226) / (652 / 4774)
=0.13107539 / 0.1365731
=0.9597

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)
=((7394 + 1746) / 12467) / ((6732 + 1592) / 11326)
=0.73313548 / 0.73494614
=0.9975

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
=(437 - 9 - 1727) / 12467
=-0.1042

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.

United Rentals Inc has a M-score of -2.88 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.

United Rentals Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.90921.01370.85911.00860.9991.02841.17921.05451.08390.8424
GMI 0.95420.9480.92331.01011.03841.30510.87950.85520.89220.9613
AQI 2.31770.96860.3920.92810.28241.12651.00741.32053.68780.9325
SGI 1.07911.15161.02161.0250.87560.72180.94871.16721.57681.2035
DEPI 0.27241.06223.46641.11260.95410.97010.99211.03760.97210.8951
SGAI 1.02041.04131.00680.9471.01341.07060.94820.95010.91620.9072
LVGI 1.20810.94470.8480.86531.7040.98551.00140.95740.86530.9538
TATA -0.0899-0.0882-0.077-0.1063-0.3503-0.1293-0.1302-0.1231-0.0598-0.1041
M-score -2.56-2.77-2.90-2.90-4.74-3.11-3.02-2.78-1.08-2.96

United Rentals Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.0171.31011.20911.08391.0460.69450.74550.84240.941.0266
GMI 0.85640.85190.85690.89220.91940.94020.96110.96130.94680.9371
AQI 5.9254.21284.07633.68780.83170.91280.90210.93250.92641.0073
SGI 1.20251.32031.46791.57681.66221.5361.34641.20351.10351.0947
DEPI 1.08651.3831.13830.97210.82570.62530.78510.89511.00591.0499
SGAI 0.91570.90260.90080.91620.93880.92280.93370.90720.91180.9597
LVGI 1.0340.86870.86460.86530.79550.96380.95940.95380.95990.9975
TATA -0.0791-0.0558-0.0547-0.0598-0.0738-0.0918-0.0913-0.1041-0.1093-0.1042
M-score -0.73-0.85-0.88-1.08-2.25-2.80-2.89-2.96-2.98-2.88
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