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United Rentals Inc (NYSE:URI)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

URI' s 10-Year Beneish M-Score Range
Min: -4.83   Max: -0.73
Current: -2.89

-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 * 1.0394+0.528 * 0.9373+0.404 * 1.0174+0.892 * 1.1219+0.115 * 1.014
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9689+4.679 * -0.1144-0.327 * 1.0151
=-2.89

* 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 $941 Mil.
Revenue was 1544 + 1399 + 1178 + 1338 = $5,459 Mil.
Gross Profit was 688 + 589 + 448 + 567 = $2,292 Mil.
Total Current Assets was $1,378 Mil.
Total Assets was $12,483 Mil.
Property, Plant and Equipment(Net PPE) was $6,569 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,166 Mil.
Selling, General & Admin. Expense(SGA) was $712 Mil.
Total Current Liabilities was $1,695 Mil.
Long-Term Debt was $7,477 Mil.
Net Income was 192 + 94 + 60 + 140 = $486 Mil.
Non Operating Income was 5 + 4 + 1 + 2 = $12 Mil.
Cash Flow from Operations was 412 + 546 + 508 + 436 = $1,902 Mil.
Accounts Receivable was $807 Mil.
Revenue was 1311 + 1206 + 1100 + 1249 = $4,866 Mil.
Gross Profit was 564 + 471 + 385 + 495 = $1,915 Mil.
Total Current Assets was $1,414 Mil.
Total Assets was $11,563 Mil.
Property, Plant and Equipment(Net PPE) was $6,019 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,086 Mil.
Selling, General & Admin. Expense(SGA) was $655 Mil.
Total Current Liabilities was $1,418 Mil.
Long-Term Debt was $6,952 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)
=(941 / 5459) / (807 / 4866)
=0.17237589 / 0.16584464
=1.0394

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)
=(589 / 4866) / (688 / 5459)
=0.39354706 / 0.41985712
=0.9373

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 - (1378 + 6569) / 12483) / (1 - (1414 + 6019) / 11563)
=0.36337419 / 0.35717374
=1.0174

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
=5459 / 4866
=1.1219

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))
=(1086 / (1086 + 6019)) / (1166 / (1166 + 6569))
=0.15285011 / 0.15074337
=1.014

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)
=(712 / 5459) / (655 / 4866)
=0.13042682 / 0.13460748
=0.9689

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)
=((7477 + 1695) / 12483) / ((6952 + 1418) / 11563)
=0.73475927 / 0.72386059
=1.0151

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
=(486 - 12 - 1902) / 12483
=-0.1144

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 -2.89 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.31011.20911.08391.0460.69450.74550.84240.941.02661.0394
GMI 0.85190.85690.89220.91940.94020.96110.96130.94680.93710.9373
AQI 4.21284.07633.68780.83170.91280.90210.93250.92641.00731.0174
SGI 1.32031.46791.57681.66221.5361.34641.20351.10351.09471.1219
DEPI 1.3831.13830.97210.82570.62530.78510.89511.00591.04991.014
SGAI 0.90260.90080.91620.93880.92280.93370.90720.91180.95970.9689
LVGI 0.86870.86460.86530.79550.96380.95940.95380.95990.99751.0151
TATA -0.0558-0.0547-0.0598-0.0738-0.0918-0.0913-0.1041-0.1093-0.1042-0.1144
M-score -0.85-0.88-1.08-2.25-2.80-2.89-2.96-2.98-2.88-2.89
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