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YRC Worldwide, Inc. (NAS:YRCW)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

YRCW' s 10-Year Beneish M-Score Range
Min: -4.71   Max: 1.26
Current: -2.84

-4.71
1.26

During the past 13 years, the highest Beneish M-Score of YRC Worldwide, Inc. was 1.26. 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 * 0.9987+0.528 * 1.002+0.404 * 0.7345+0.892 * 1.0031+0.115 * 0.979
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0029+4.679 * -0.0493-0.327 * 1.0656
=-2.84

* 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 $461 Mil.
Revenue was 1207.7 + 1252.7 + 1242.5 + 1162.5 = $4,865 Mil.
Gross Profit was 795.9 + 829.3 + 831 + 779.8 = $3,236 Mil.
Total Current Assets was $798 Mil.
Total Assets was $2,065 Mil.
Property, Plant and Equipment(Net PPE) was $1,090 Mil.
Depreciation, Depletion and Amortization(DDA) was $172 Mil.
Selling, General & Admin. Expense(SGA) was $2,803 Mil.
Total Current Liabilities was $585 Mil.
Long-Term Debt was $1,355 Mil.
Net Income was 0.4 + -44.4 + -15.1 + -24.5 = $-84 Mil.
Non Operating Income was 3 + 0.2 + 2.5 + 0.3 = $6 Mil.
Cash Flow from Operations was 15.1 + 15.2 + -4.3 + -13.9 = $12 Mil.
Accounts Receivable was $460 Mil.
Revenue was 1168.6 + 1236.8 + 1250.8 + 1194.3 = $4,851 Mil.
Gross Profit was 778 + 834.6 + 838.7 + 781.4 = $3,233 Mil.
Total Current Assets was $774 Mil.
Total Assets was $2,226 Mil.
Property, Plant and Equipment(Net PPE) was $1,191 Mil.
Depreciation, Depletion and Amortization(DDA) was $184 Mil.
Selling, General & Admin. Expense(SGA) was $2,786 Mil.
Total Current Liabilities was $595 Mil.
Long-Term Debt was $1,366 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)
=(460.9 / 4865.4) / (460.1 / 4850.5)
=0.09473014 / 0.0948562
=0.9987

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)
=(829.3 / 4850.5) / (795.9 / 4865.4)
=0.66646737 / 0.66510462
=1.002

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 - (797.9 + 1089.8) / 2064.9) / (1 - (774.1 + 1191.4) / 2225.5)
=0.08581529 / 0.11682768
=0.7345

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
=4865.4 / 4850.5
=1.0031

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))
=(183.8 / (183.8 + 1191.4)) / (172.3 / (172.3 + 1089.8))
=0.13365329 / 0.1365185
=0.979

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)
=(2803.1 / 4865.4) / (2786.4 / 4850.5)
=0.5761294 / 0.57445624
=1.0029

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)
=((1354.8 + 584.6) / 2064.9) / ((1366.3 + 595.2) / 2225.5)
=0.93922224 / 0.88137497
=1.0656

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
=(-83.6 - 6 - 12.1) / 2064.9
=-0.0493

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 -2.84 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.5051.15780.92970.83880.9711.1230.95930.96860.9987
GMI 1.01421.094201.05480.98530.98531.04970.96731.0021
AQI 0.93491.1270.72110.29811.51160.91121.18330.93320.7345
SGI 2.20541.29170.970.92920.54480.88991.12320.99621.0031
DEPI 0.54511.05441.11150.90450.87221.04850.91780.95560.979
SGAI 0.95780.91921.03190.98761.25150.84550.92680.99411.0029
LVGI 0.90091.0961.15521.33581.00591.11551.13571.08421.0656
TATA -0.0517-0.0254-0.2032-0.3027-0.1313-0.1205-0.1035-0.04-0.0493
M-score -2.13-2.10-4.21-4.48-3.39-3.08-2.83-2.78-2.84

YRC Worldwide, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.99550.95930.88940.87530.91980.96861.05791.06231.01560.9987
GMI 1.02951.04971.03921.01560.99160.96730.96430.97510.98991.002
AQI 1.14741.18331.24191.29891.18390.93320.88420.87690.51820.7345
SGI 1.10591.12321.10511.07061.03080.99620.97540.9750.98611.0031
DEPI 0.98530.91780.90910.90160.89620.95560.99070.99961.00450.979
SGAI 0.92590.92680.97990.97950.98210.9940.99770.98930.99631.0029
LVGI 1.04371.13571.11491.09841.1491.08421.07311.07321.07111.0656
TATA -0.0491-0.1035-0.1089-0.1106-0.0722-0.04-0.0142-0.0086-0.0528-0.0493
M-score -2.55-2.83-2.92-2.96-2.85-2.78-2.61-2.57-2.95-2.84
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