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United Rentals Inc (NYSE:URI)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

URI' s Beneish M-Score Range Over the Past 10 Years
Min: -4.84   Max: -0.73
Current: -2.95

-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 -2.88.


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 * 0.9844+0.528 * 0.9687+0.404 * 0.9389+0.892 * 1.0731+0.115 * 0.9877
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9725+4.679 * -0.1022-0.327 * 1.0147
=-2.95

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 215 + 86 + 115 + 194 = $610 Mil.
Non Operating Income was -1 + 6 + -3 + 4 = $6 Mil.
Cash Flow from Operations was 307 + 575 + 675 + 335 = $1,892 Mil.
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.



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)
=(994 / 5858) / (941 / 5459)
=0.16968249 / 0.17237589
=0.9844

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)
=(618 / 5459) / (690 / 5858)
=0.41985712 / 0.43342438
=0.9687

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 - (1426 + 6874) / 12598) / (1 - (1378 + 6569) / 12483)
=0.34116526 / 0.36337419
=0.9389

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
=5858 / 5459
=1.0731

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))
=(1166 / (1166 + 6569)) / (1238 / (1238 + 6874))
=0.15074337 / 0.15261341
=0.9877

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)
=(743 / 5858) / (712 / 5459)
=0.1268351 / 0.13042682
=0.9725

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)
=((7876 + 1517) / 12598) / ((7477 + 1695) / 12483)
=0.74559454 / 0.73475927
=1.0147

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
=(610 - 6 - 1892) / 12598
=-0.1022

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 -2.95 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 0.88741.0130.99471.02841.17921.05451.08390.84241.0190.9669
GMI 0.95761.00421.03041.32280.87950.85520.89220.96130.93741.0034
AQI 1.01940.92810.28241.12651.00741.32053.68780.93250.98950.9587
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 0.90760.90641.62680.98551.00140.95740.86530.95381.02211.0174
TATA -0.077-0.1053-0.3503-0.1293-0.1302-0.1231-0.0598-0.1041-0.1023-0.1177
M-score -2.83-2.92-4.72-3.10-3.02-2.78-1.08-2.96-2.86-3.05

United Rentals Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.74550.84240.941.02661.03941.0190.97480.94590.98440.9669
GMI 0.96110.96130.94680.93710.93730.93740.94550.95690.96871.0034
AQI 0.90210.93250.92641.00731.01740.98951.00220.9310.93890.9587
SGI 1.34641.20351.10351.09471.12191.14731.15681.11981.07311.0232
DEPI 0.78510.89511.00591.04991.0141.01931.00190.98210.98770.9893
SGAI 0.93370.90720.91180.95970.96891.02911.02540.98950.97250.9206
LVGI 0.95940.95380.95990.99751.01511.02211.05091.01741.01471.0174
TATA -0.0913-0.1041-0.1093-0.1042-0.1144-0.1023-0.1126-0.1128-0.1022-0.1187
M-score -2.89-2.96-2.98-2.88-2.89-2.86-2.94-3.01-2.95-3.05
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