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YRC Worldwide Inc (NAS:YRCW)
Beneish M-Score
-2.99 (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.

YRC Worldwide Inc has a M-score of -2.99 suggests that the company is not a manipulator.

YRCW' s Beneish M-Score Range Over the Past 10 Years
Min: -4.71   Max: 1.27
Current: -2.99

-4.71
1.27

During the past 13 years, the highest Beneish M-Score of YRC Worldwide Inc was 1.27. The lowest was -4.71. And the median was -2.84.


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 YRC Worldwide 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 * 0.9528+0.528 * 0.9461+0.404 * 0.9767+0.892 * 0.9534+0.115 * 0.9504
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.037+4.679 * -0.0793-0.327 * 1.0184
=-2.99

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $427 Mil.
Revenue was 1142.7 + 1244.9 + 1258.4 + 1186.4 = $4,832 Mil.
Gross Profit was 812.3 + 878.2 + 877.6 + 824.8 = $3,393 Mil.
Total Current Assets was $734 Mil.
Total Assets was $1,895 Mil.
Property, Plant and Equipment(Net PPE) was $937 Mil.
Depreciation, Depletion and Amortization(DDA) was $164 Mil.
Selling, General & Admin. Expense(SGA) was $2,868 Mil.
Total Current Liabilities was $574 Mil.
Long-Term Debt was $1,062 Mil.
Net Income was -23.5 + 19.8 + 26 + -21.6 = $1 Mil.
Non Operating Income was 2.7 + 4.5 + -0.7 + 3.7 = $10 Mil.
Cash Flow from Operations was 49.3 + 60.4 + 56.9 + -25.8 = $141 Mil.
Accounts Receivable was $471 Mil.
Revenue was 1217.7 + 1322.6 + 1317.6 + 1210.9 = $5,069 Mil.
Gross Profit was 825.9 + 880.2 + 865.8 + 795.3 = $3,367 Mil.
Total Current Assets was $752 Mil.
Total Assets was $1,985 Mil.
Property, Plant and Equipment(Net PPE) was $994 Mil.
Depreciation, Depletion and Amortization(DDA) was $164 Mil.
Selling, General & Admin. Expense(SGA) was $2,901 Mil.
Total Current Liabilities was $604 Mil.
Long-Term Debt was $1,079 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)
=(427.4 / 4832.4) / (470.5 / 5068.8)
=0.08844467 / 0.09282276
=0.9528

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)
=(878.2 / 5068.8) / (812.3 / 4832.4)
=0.66429924 / 0.70211489
=0.9461

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 - (734.4 + 937.3) / 1894.6) / (1 - (751.7 + 994.2) / 1985)
=0.11765016 / 0.1204534
=0.9767

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
=4832.4 / 5068.8
=0.9534

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))
=(163.6 / (163.6 + 994.2)) / (163.7 / (163.7 + 937.3))
=0.14130247 / 0.14868302
=0.9504

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)
=(2868.2 / 4832.4) / (2901.2 / 5068.8)
=0.5935353 / 0.57236427
=1.037

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)
=((1061.7 + 573.5) / 1894.6) / ((1078.8 + 603.5) / 1985)
=0.86308456 / 0.8475063
=1.0184

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
=(0.7 - 10.2 - 140.8) / 1894.6
=-0.0793

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.

YRC Worldwide Inc has a M-score of -2.99 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.

YRC Worldwide Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.90130.92970.83880.9711.1230.95930.96860.99870.97990.9528
GMI 0.67561.44311.05480.98530.98531.04970.96731.00211.00120.9461
AQI 0.99930.72110.29811.51160.91121.18330.93320.73451.40360.9767
SGI 1.13470.970.92920.54480.88991.12320.99621.00311.04180.9534
DEPI 0.94651.11150.90450.87221.04850.91780.95560.9790.96610.9504
SGAI 0.9891.03190.98761.25150.84550.92680.99411.00290.99351.037
LVGI 0.85331.15521.33581.00591.11551.13571.08421.06560.90231.0184
TATA -0.0284-0.2032-0.3027-0.1313-0.1205-0.1035-0.0403-0.0493-0.0589-0.0793
M-score -2.71-3.44-4.48-3.39-3.08-2.83-2.78-2.84-2.54-2.99

YRC Worldwide Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.01560.99871.04031.0231.01420.97990.93740.92220.93010.9528
GMI 0.98991.0021.01331.01731.01081.00120.98270.96340.95030.9461
AQI 0.51820.73450.82960.79351.21551.40361.30881.24961.24610.9767
SGI 0.98611.00311.01971.03711.04821.04181.02660.99920.97010.9534
DEPI 1.00450.9790.96320.95530.96650.96610.95160.94410.93720.9504
SGAI 0.99631.00291.01091.00441.00170.99350.98610.99611.00691.037
LVGI 1.07111.06560.93190.92960.91420.90231.02441.00741.00811.0184
TATA -0.0531-0.0493-0.0547-0.0515-0.0407-0.0589-0.0438-0.0568-0.0642-0.0793
M-score -2.95-2.84-2.73-2.72-2.50-2.54-2.61-2.74-2.81-2.99
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