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United Rentals Inc (NYSE:URI)
Beneish M-Score
-3.30 (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 -3.30 suggests that the company is not a manipulator.

URI' s Beneish M-Score Range Over the Past 10 Years
Min: -4.82   Max: -0.73
Current: -3.3

-4.82
-0.73

During the past 13 years, the highest Beneish M-Score of United Rentals Inc was -0.73. The lowest was -4.82. 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 * 0.984+0.528 * 1.0194+0.404 * 0.9764+0.892 * 0.9983+0.115 * 0.987
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9225+4.679 * -0.1763-0.327 * 0.9725
=-3.30

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $833 Mil.
Revenue was 1310 + 1523 + 1550 + 1429 = $5,812 Mil.
Gross Profit was 500 + 648 + 690 + 618 = $2,456 Mil.
Total Current Assets was $1,182 Mil.
Total Assets was $11,784 Mil.
Property, Plant and Equipment(Net PPE) was $6,467 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,250 Mil.
Selling, General & Admin. Expense(SGA) was $710 Mil.
Total Current Liabilities was $1,229 Mil.
Long-Term Debt was $7,203 Mil.
Net Income was 92 + 169 + 215 + 86 = $562 Mil.
Non Operating Income was 0 + 922 + -213 + 6 = $715 Mil.
Cash Flow from Operations was 604 + 438 + 307 + 575 = $1,924 Mil.
Accounts Receivable was $848 Mil.
Revenue was 1315 + 1564 + 1544 + 1399 = $5,822 Mil.
Gross Profit was 524 + 707 + 688 + 589 = $2,508 Mil.
Total Current Assets was $1,452 Mil.
Total Assets was $12,282 Mil.
Property, Plant and Equipment(Net PPE) was $6,416 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,221 Mil.
Selling, General & Admin. Expense(SGA) was $771 Mil.
Total Current Liabilities was $1,555 Mil.
Long-Term Debt was $7,482 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)
=(833 / 5812) / (848 / 5822)
=0.14332416 / 0.14565441
=0.984

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)
=(648 / 5822) / (500 / 5812)
=0.4307798 / 0.42257398
=1.0194

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 - (1182 + 6467) / 11784) / (1 - (1452 + 6416) / 12282)
=0.35089952 / 0.35938772
=0.9764

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
=5812 / 5822
=0.9983

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))
=(1221 / (1221 + 6416)) / (1250 / (1250 + 6467))
=0.15987953 / 0.16198004
=0.987

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)
=(710 / 5812) / (771 / 5822)
=0.12216105 / 0.13242872
=0.9225

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)
=((7203 + 1229) / 11784) / ((7482 + 1555) / 12282)
=0.7155465 / 0.73579222
=0.9725

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
=(562 - 715 - 1924) / 11784
=-0.1763

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 -3.30 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.96161.00860.9991.02841.17921.05451.08390.84241.0190.9669
GMI 0.92331.01011.03841.30510.87950.85520.89220.96130.93741.0034
AQI 1.01940.92810.28241.12651.00741.32053.68780.93250.99660.9518
SGI 1.02161.0250.87560.72180.94871.16721.57681.20351.14731.0232
DEPI 1.01851.11260.95410.97010.99211.03760.97210.89511.01930.9893
SGAI 1.00680.9471.01341.07060.94820.95010.91620.90721.02910.9206
LVGI 0.90760.90641.62680.98551.00140.95740.86530.95381.040.9999
TATA -0.1182-0.1063-0.3503-0.1319-0.1302-0.1231-0.0598-0.1041-0.1051-0.1177
M-score -3.05-2.92-4.71-3.12-3.02-2.78-1.08-2.96-2.87-3.05

United Rentals Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.84240.941.02661.03941.0190.97480.94590.98440.96690.984
GMI 0.96130.94680.93710.93730.93740.94550.95690.96871.00341.0194
AQI 0.93250.92641.00731.01740.99661.00220.9310.93890.95180.9764
SGI 1.20351.10351.09471.12191.14731.15681.11981.07311.02320.9983
DEPI 0.89511.00591.04991.0141.01931.00190.98210.98770.98930.987
SGAI 0.90720.91180.95970.96891.02911.02540.98950.97250.92060.9225
LVGI 0.95380.95990.99751.01511.041.05091.01741.01470.99990.9725
TATA -0.1041-0.087-0.0841-0.0745-0.136-0.1639-0.1628-0.1551-0.1761-0.1763
M-score -2.96-2.88-2.78-2.71-3.02-3.18-3.24-3.20-3.32-3.30
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