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United Rentals Inc (NYSE:URI)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

URI' s 10-Year Beneish M-Score Range
Min: -4.74   Max: -1.08
Current: -2.86

-4.74
-1.08

During the past 13 years, the highest Beneish M-Score of United Rentals Inc was -1.08. The lowest was -4.74. And the median was -2.99.


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 * 1.019+0.528 * 0.9374+0.404 * 0.9895+0.892 * 1.1473+0.115 * 1.0193
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0291+4.679 * -0.1023-0.327 * 1.0221
=-2.86

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $940 Mil.
Revenue was 1564 + 1544 + 1399 + 1178 = $5,685 Mil.
Gross Profit was 707 + 688 + 589 + 448 = $2,432 Mil.
Total Current Assets was $1,546 Mil.
Total Assets was $12,467 Mil.
Property, Plant and Equipment(Net PPE) was $6,446 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,194 Mil.
Selling, General & Admin. Expense(SGA) was $758 Mil.
Total Current Liabilities was $1,478 Mil.
Long-Term Debt was $7,434 Mil.
Net Income was 194 + 192 + 94 + 60 = $540 Mil.
Non Operating Income was 4 + 5 + 4 + 1 = $14 Mil.
Cash Flow from Operations was 335 + 412 + 546 + 508 = $1,801 Mil.
Accounts Receivable was $804 Mil.
Revenue was 1338 + 1311 + 1206 + 1100 = $4,955 Mil.
Gross Profit was 567 + 564 + 471 + 385 = $1,987 Mil.
Total Current Assets was $1,362 Mil.
Total Assets was $11,231 Mil.
Property, Plant and Equipment(Net PPE) was $5,795 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,098 Mil.
Selling, General & Admin. Expense(SGA) was $642 Mil.
Total Current Liabilities was $1,286 Mil.
Long-Term Debt was $6,569 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)
=(940 / 5685) / (804 / 4955)
=0.16534741 / 0.16226034
=1.019

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)
=(688 / 4955) / (707 / 5685)
=0.40100908 / 0.42779244
=0.9374

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 - (1546 + 6446) / 12467) / (1 - (1362 + 5795) / 11231)
=0.35894762 / 0.36274597
=0.9895

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
=5685 / 4955
=1.1473

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))
=(1098 / (1098 + 5795)) / (1194 / (1194 + 6446))
=0.15929204 / 0.15628272
=1.0193

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)
=(758 / 5685) / (642 / 4955)
=0.13333333 / 0.12956609
=1.0291

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)
=((7434 + 1478) / 12467) / ((6569 + 1286) / 11231)
=0.7148472 / 0.69940344
=1.0221

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
=(540 - 14 - 1801) / 12467
=-0.1023

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 -2.86 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.89920.88741.0130.99471.02841.17921.05451.08390.84241.019
GMI 0.97050.95761.00421.03041.32280.87950.85520.89220.96130.9374
AQI 0.37251.01940.92810.28241.12651.00741.32053.68780.93250.9895
SGI 1.15981.10711.02060.87940.72180.94871.16721.57681.20351.1473
DEPI 3.82491.0231.0570.94410.97010.99211.03760.97210.89511.0193
SGAI 1.06191.00130.95580.99451.08080.94820.95010.91620.90721.0291
LVGI 0.88260.90760.90641.62680.98551.00140.95740.86530.95381.0221
TATA -0.0812-0.077-0.1053-0.3503-0.1298-0.1302-0.1241-0.0598-0.1041-0.1023
M-score -2.73-2.83-2.92-4.72-3.10-3.02-2.78-1.08-2.96-2.86

United Rentals Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.20911.08391.0460.69450.74550.84240.941.02661.03941.019
GMI 0.85690.89220.91940.94020.96110.96130.94680.93710.93730.9374
AQI 4.07633.68780.83170.91280.90210.93250.92641.00731.01740.9895
SGI 1.46791.57681.66221.5361.34641.20351.10351.09471.12191.1473
DEPI 1.13830.97210.82570.62530.78510.89511.00591.04991.0141.0193
SGAI 0.90080.91620.93880.92280.93370.90720.91180.95970.96891.0291
LVGI 0.86460.86530.79550.96380.95940.95380.95990.99751.01511.0221
TATA -0.055-0.0598-0.0738-0.0918-0.0913-0.1041-0.1093-0.1042-0.1144-0.1023
M-score -0.88-1.08-2.25-2.80-2.89-2.96-2.98-2.88-2.89-2.86
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