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United Rentals Inc (NYSE:URI)
Beneish M-Score
-3.08 (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 -3.08 suggests that the company is not a manipulator.

URI' s Beneish M-Score Range Over the Past 10 Years
Min: -4.81   Max: -0.73
Current: -3.08

-4.81
-0.73

During the past 13 years, the highest Beneish M-Score of United Rentals Inc was -0.73. The lowest was -4.81. And the median was -3.01.


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 * 0.9502+0.528 * 1.0432+0.404 * 0.9692+0.892 * 0.9836+0.115 * 0.9938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9756+4.679 * -0.1215-0.327 * 0.9629
=-3.08

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $929 Mil.
Revenue was 1508 + 1421 + 1310 + 1523 = $5,762 Mil.
Gross Profit was 656 + 590 + 500 + 648 = $2,394 Mil.
Total Current Assets was $1,354 Mil.
Total Assets was $12,275 Mil.
Property, Plant and Equipment(Net PPE) was $6,862 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,245 Mil.
Selling, General & Admin. Expense(SGA) was $713 Mil.
Total Current Liabilities was $1,420 Mil.
Long-Term Debt was $7,393 Mil.
Net Income was 187 + 134 + 92 + 169 = $582 Mil.
Non Operating Income was 1 + 2 + 0 + 2 = $5 Mil.
Cash Flow from Operations was 383 + 643 + 604 + 438 = $2,068 Mil.
Accounts Receivable was $994 Mil.
Revenue was 1550 + 1429 + 1315 + 1564 = $5,858 Mil.
Gross Profit was 690 + 618 + 524 + 707 = $2,539 Mil.
Total Current Assets was $1,426 Mil.
Total Assets was $12,598 Mil.
Property, Plant and Equipment(Net PPE) was $6,874 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,238 Mil.
Selling, General & Admin. Expense(SGA) was $743 Mil.
Total Current Liabilities was $1,517 Mil.
Long-Term Debt was $7,876 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)
=(929 / 5762) / (994 / 5858)
=0.16122874 / 0.16968249
=0.9502

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)
=(2539 / 5858) / (2394 / 5762)
=0.43342438 / 0.41548074
=1.0432

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 - (1354 + 6862) / 12275) / (1 - (1426 + 6874) / 12598)
=0.3306721 / 0.34116526
=0.9692

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
=5762 / 5858
=0.9836

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))
=(1238 / (1238 + 6874)) / (1245 / (1245 + 6862))
=0.15261341 / 0.15357099
=0.9938

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)
=(713 / 5762) / (743 / 5858)
=0.12374176 / 0.1268351
=0.9756

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)
=((7393 + 1420) / 12275) / ((7876 + 1517) / 12598)
=0.71796334 / 0.74559454
=0.9629

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
=(582 - 5 - 2068) / 12275
=-0.1215

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 -3.08 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 local exchange's currency.

United Rentals Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.88741.0130.99471.02841.17921.05451.08390.84241.0190.9669
GMI 0.95761.00421.03041.32280.87950.85520.89220.96130.93741.0034
AQI 1.01940.92810.28241.12651.00741.32053.68780.93250.99660.9518
SGI 1.10711.02060.87940.72180.94871.16721.57681.20351.14731.0232
DEPI 1.0231.0570.94410.97010.99211.03760.97210.89511.01930.9893
SGAI 1.00130.95580.99451.08080.94820.95010.91620.90721.02910.9206
LVGI 0.90760.90641.62680.98551.00140.95740.86530.95381.040.9999
TATA -0.1182-0.1053-0.3503-0.1298-0.1302-0.1241-0.0598-0.1041-0.1051-0.1177
M-score -3.02-2.92-4.72-3.10-3.02-2.78-1.08-2.96-2.87-3.05

United Rentals Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.02661.03941.0190.97480.94590.98440.96690.9840.97780.9502
GMI 0.93710.93730.93740.94550.95690.96871.00341.01941.03631.0432
AQI 1.00731.01740.99661.00220.9310.93890.95180.97640.97930.9692
SGI 1.09471.12191.14731.15681.11981.07311.02320.99830.99180.9836
DEPI 1.04991.0141.01931.00190.98210.98770.98930.9870.97920.9938
SGAI 0.95970.96891.02911.02540.98950.97250.92060.92250.94580.9756
LVGI 0.99751.01511.041.05091.01741.01470.99990.97250.97040.9629
TATA -0.0841-0.0745-0.136-0.1639-0.1628-0.1721-0.1177-0.1163-0.1144-0.1215
M-score -2.78-2.71-3.02-3.18-3.24-3.28-3.05-3.02-3.02-3.08
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