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United Rentals Inc (NYSE:URI)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

URI' s 10-Year Beneish M-Score Range
Min: -4.84   Max: -0.73
Current: -2.94

-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 * 0.9748+0.528 * 0.9455+0.404 * 1.0022+0.892 * 1.1568+0.115 * 1.0019
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0254+4.679 * -0.1126-0.327 * 1.0509
=-2.94

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was 115 + 194 + 192 + 94 = $595 Mil.
Non Operating Income was -3 + 4 + 5 + 4 = $10 Mil.
Cash Flow from Operations was 675 + 335 + 412 + 546 = $1,968 Mil.
Accounts Receivable was $752 Mil.
Revenue was 1178 + 1338 + 1311 + 1206 = $5,033 Mil.
Gross Profit was 448 + 567 + 564 + 471 = $2,050 Mil.
Total Current Assets was $1,400 Mil.
Total Assets was $11,247 Mil.
Property, Plant and Equipment(Net PPE) was $5,814 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,109 Mil.
Selling, General & Admin. Expense(SGA) was $650 Mil.
Total Current Liabilities was $1,101 Mil.
Long-Term Debt was $6,774 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)
=(848 / 5822) / (752 / 5033)
=0.14565441 / 0.14941387
=0.9748

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)
=(707 / 5033) / (524 / 5822)
=0.40731174 / 0.4307798
=0.9455

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 - (1452 + 6416) / 12282) / (1 - (1400 + 5814) / 11247)
=0.35938772 / 0.35858451
=1.0022

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
=5822 / 5033
=1.1568

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))
=(1109 / (1109 + 5814)) / (1221 / (1221 + 6416))
=0.16019067 / 0.15987953
=1.0019

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)
=(771 / 5822) / (650 / 5033)
=0.13242872 / 0.12914763
=1.0254

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)
=((7482 + 1555) / 12282) / ((6774 + 1101) / 11247)
=0.73579222 / 0.70018672
=1.0509

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
=(595 - 10 - 1968) / 12282
=-0.1126

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 -2.94 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.08391.0460.69450.74550.84240.941.02661.03941.0190.9748
GMI 0.89220.91940.94020.96110.96130.94680.93710.93730.93740.9455
AQI 3.68780.83170.91280.90210.93250.92641.00731.01740.98951.0022
SGI 1.57681.66221.5361.34641.20351.10351.09471.12191.14731.1568
DEPI 0.97210.82570.62530.78510.89511.00591.04991.0141.01931.0019
SGAI 0.91620.93880.92280.93370.90720.91180.95970.96891.02911.0254
LVGI 0.86530.79550.96380.95940.95380.95990.99751.01511.02211.0509
TATA -0.0598-0.0738-0.0918-0.0913-0.1041-0.1091-0.104-0.1142-0.1021-0.1126
M-score -1.08-2.25-2.80-2.89-2.96-2.98-2.87-2.89-2.86-2.94
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