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United Rentals Inc (NYSE:URI)
Beneish M-Score
-3.01 (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 -3.01 suggests that the company is not a manipulator.

URI' s 10-Year Beneish M-Score Range
Min: -4.84   Max: -0.73
Current: -3.01

-4.84
-0.73

During the past 13 years, the highest Beneish M-Score of United Rentals Inc was -0.73. The lowest was -4.84. And the median was -2.89.


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 * 0.9459+0.528 * 0.9569+0.404 * 0.931+0.892 * 1.1198+0.115 * 0.9821
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9895+4.679 * -0.1128-0.327 * 1.0174
=-3.01

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $894 Mil.
Revenue was 1429 + 1315 + 1564 + 1544 = $5,852 Mil.
Gross Profit was 618 + 524 + 707 + 688 = $2,537 Mil.
Total Current Assets was $1,436 Mil.
Total Assets was $12,605 Mil.
Property, Plant and Equipment(Net PPE) was $6,821 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,229 Mil.
Selling, General & Admin. Expense(SGA) was $759 Mil.
Total Current Liabilities was $1,582 Mil.
Long-Term Debt was $7,820 Mil.
Net Income was 86 + 115 + 194 + 192 = $587 Mil.
Non Operating Income was 6 + -3 + 4 + 5 = $12 Mil.
Cash Flow from Operations was 575 + 675 + 335 + 412 = $1,997 Mil.
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.



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)
=(894 / 5852) / (844 / 5226)
=0.15276828 / 0.16150019
=0.9459

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)
=(524 / 5226) / (618 / 5852)
=0.41484883 / 0.433527
=0.9569

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 - (1436 + 6821) / 12605) / (1 - (1396 + 6452) / 12467)
=0.34494248 / 0.37049812
=0.931

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
=5852 / 5226
=1.1198

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))
=(1138 / (1138 + 6452)) / (1229 / (1229 + 6821))
=0.14993412 / 0.15267081
=0.9821

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)
=(759 / 5852) / (685 / 5226)
=0.12969925 / 0.13107539
=0.9895

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)
=((7820 + 1582) / 12605) / ((7394 + 1746) / 12467)
=0.74589449 / 0.73313548
=1.0174

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
=(587 - 12 - 1997) / 12605
=-0.1128

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 -3.01 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.0460.69450.74550.84240.941.02661.03941.0190.97480.9459
GMI 0.91940.94020.96110.96130.94680.93710.93730.93740.94550.9569
AQI 0.83170.91280.90210.93250.92641.00731.01740.98951.00220.931
SGI 1.66221.5361.34641.20351.10351.09471.12191.14731.15681.1198
DEPI 0.82570.62530.78510.89511.00591.04991.0141.01931.00190.9821
SGAI 0.93880.92280.93370.90720.91180.95970.96891.02911.02540.9895
LVGI 0.79550.96380.95940.95380.95990.99751.01511.02211.05091.0174
TATA -0.0738-0.0918-0.0913-0.1041-0.1091-0.104-0.1142-0.1021-0.1126-0.1128
M-score -2.25-2.80-2.89-2.96-2.98-2.87-2.89-2.86-2.94-3.01
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