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YRC Worldwide Inc (NAS:YRCW)
Beneish M-Score
-2.54 (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 -2.54 suggests that the company is not a manipulator.

YRCW' s 10-Year Beneish M-Score Range
Min: -4.71   Max: 1.26
Current: -2.54

-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 -2.83.


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 * 0.9799+0.528 * 1.0012+0.404 * 1.4036+0.892 * 1.0418+0.115 * 0.9661
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9935+4.679 * -0.0589-0.327 * 0.9023
=-2.54

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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.
Net Income was 6.2 + 1.2 + -4.9 + -70.2 = $-68 Mil.
Non Operating Income was 2.8 + 2.7 + -1.1 + 16.3 = $21 Mil.
Cash Flow from Operations was 54.8 + 29.3 + 0.6 + -56.2 = $29 Mil.
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.



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)
=(470.5 / 5068.8) / (460.9 / 4865.4)
=0.09282276 / 0.09473014
=0.9799

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)
=(880.2 / 4865.4) / (825.9 / 5068.8)
=0.66510462 / 0.66429924
=1.0012

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 - (751.7 + 994.2) / 1985) / (1 - (797.9 + 1089.8) / 2064.9)
=0.1204534 / 0.08581529
=1.4036

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
=5068.8 / 4865.4
=1.0418

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))
=(172.3 / (172.3 + 1089.8)) / (163.6 / (163.6 + 994.2))
=0.1365185 / 0.14130247
=0.9661

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)
=(2901.2 / 5068.8) / (2803.1 / 4865.4)
=0.57236427 / 0.5761294
=0.9935

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)
=((1078.8 + 603.5) / 1985) / ((1354.8 + 584.6) / 2064.9)
=0.8475063 / 0.93922224
=0.9023

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
=(-67.7 - 20.7 - 28.5) / 1985
=-0.0589

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 -2.54 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.15780.92970.83880.9711.1230.95930.96860.99870.9799
GMI 1.094201.05480.98530.98531.04970.96731.00211.0012
AQI 1.1270.72110.29811.51160.91121.18330.93320.73451.4036
SGI 1.29170.970.92920.54480.88991.12320.99621.00311.0418
DEPI 1.05441.11150.90450.87221.04850.91780.95560.9790.9661
SGAI 0.91921.03190.98761.25150.84550.92680.99411.00290.9935
LVGI 1.0961.15521.33581.00591.11551.13571.08421.06560.9023
TATA -0.0254-0.2032-0.3027-0.1313-0.1205-0.1035-0.04-0.0493-0.0589
M-score -2.10-4.21-4.48-3.39-3.08-2.83-2.78-2.84-2.54

YRC Worldwide Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.91980.96861.05791.06231.01560.99871.04031.0231.01420.9799
GMI 0.99160.96730.96430.97510.98991.0021.01331.01731.01081.0012
AQI 1.18390.93320.88420.87690.51820.73450.82960.79351.21551.4036
SGI 1.03080.99620.97540.9750.98611.00311.01971.03711.04821.0418
DEPI 0.89620.95560.99070.99961.00450.9790.96320.95530.96650.9661
SGAI 0.98210.9940.99770.98930.99631.00291.01091.00441.00170.9935
LVGI 1.1491.08421.07311.07321.07111.06560.93190.92960.91420.9023
TATA -0.0722-0.04-0.0142-0.0086-0.0528-0.0493-0.0547-0.0515-0.0407-0.0589
M-score -2.85-2.78-2.61-2.57-2.95-2.84-2.73-2.72-2.50-2.54
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