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United Rentals Inc (NYSE:URI)
Beneish M-Score
-2.96 (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 -2.96 suggests that the company is not a manipulator.

URI' s 10-Year Beneish M-Score Range
Min: -4.74   Max: -1.08
Current: -2.96

-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 -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 * 0.8424+0.528 * 0.9613+0.404 * 0.9325+0.892 * 1.2035+0.115 * 0.8951
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9072+4.679 * -0.1041-0.327 * 0.9538
=-2.96

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
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.
Net Income was 140 + 143 + 83 + 21 = $387 Mil.
Non Operating Income was 2 + 2 + 0 + 1 = $5 Mil.
Cash Flow from Operations was 436 + 237 + 469 + 409 = $1,551 Mil.
Accounts Receivable was $793 Mil.
Revenue was 1249 + 1219 + 993 + 656 = $4,117 Mil.
Gross Profit was 495 + 505 + 374 + 213 = $1,587 Mil.
Total Current Assets was $1,343 Mil.
Total Assets was $11,026 Mil.
Property, Plant and Equipment(Net PPE) was $5,394 Mil.
Depreciation, Depletion and Amortization(DDA) was $897 Mil.
Selling, General & Admin. Expense(SGA) was $588 Mil.
Total Current Liabilities was $1,351 Mil.
Long-Term Debt was $6,734 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)
=(804 / 4955) / (793 / 4117)
=0.16226034 / 0.19261598
=0.8424

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)
=(564 / 4117) / (567 / 4955)
=0.38547486 / 0.40100908
=0.9613

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 - (1362 + 5795) / 11231) / (1 - (1343 + 5394) / 11026)
=0.36274597 / 0.38898966
=0.9325

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
=4955 / 4117
=1.2035

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))
=(897 / (897 + 5394)) / (1098 / (1098 + 5795))
=0.14258464 / 0.15929204
=0.8951

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)
=(642 / 4955) / (588 / 4117)
=0.12956609 / 0.14282244
=0.9072

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)
=((6569 + 1286) / 11231) / ((6734 + 1351) / 11026)
=0.69940344 / 0.73326682
=0.9538

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
=(387 - 5 - 1551) / 11231
=-0.1041

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 -2.96 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03130.89920.88741.0130.99471.02841.17921.05451.08390.8424
GMI 0.82450.97050.95761.00421.03041.32280.87950.85520.89220.9613
AQI 0.94830.37251.01940.92810.28241.12651.00741.32053.68780.9325
SGI 0.98371.15981.10711.02060.87940.72180.94871.16721.57681.2035
DEPI 0.94943.82491.0231.0570.94410.97010.99211.03760.97210.8951
SGAI 1.01661.06191.00130.95580.99451.08080.94820.95010.91620.9072
LVGI 1.02950.88260.90760.90641.62680.98551.00140.95740.86530.9538
TATA -0.1645-0.0812-0.077-0.1053-0.3503-0.1298-0.1302-0.1241-0.0598-0.1041
M-score -3.37-2.73-2.83-2.92-4.72-3.10-3.02-2.78-1.08-2.96

United Rentals Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.01311.05451.0171.31011.20911.08391.0460.69450.74550.8424
GMI 0.88190.85520.85640.85190.85690.89220.91940.94020.96110.9613
AQI 1.26271.32055.9254.21284.07633.68780.83170.91280.90210.9325
SGI 1.12061.16721.20251.32031.46791.57681.66221.5361.34641.2035
DEPI 1.02741.03761.08651.3831.13830.97210.82570.62530.78510.8951
SGAI 0.94770.95010.91570.90260.90080.91620.93880.92280.93370.9072
LVGI 0.97820.95741.0340.86870.86460.86530.79550.96380.95940.9538
TATA -0.1281-0.1241-0.0796-0.0562-0.055-0.0598-0.0738-0.0918-0.0913-0.1041
M-score -2.90-2.78-0.73-0.85-0.88-1.08-2.25-2.80-2.89-2.96
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