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Rio Tinto Beneish M-Score

: -2.71 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.71 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Rio Tinto's Beneish M-Score or its related term are showing as below:

RIO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.61   Med: -2.71   Max: -1.13
Current: -2.71

During the past 13 years, the highest Beneish M-Score of Rio Tinto was -1.13. The lowest was -3.61. And the median was -2.71.


Rio Tinto Beneish M-Score Historical Data

The historical data trend for Rio Tinto's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Rio Tinto Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.89 -2.38 -2.93 -2.61 -2.71

Rio Tinto Semi-Annual Data
Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - -2.61 - -2.71 -

Competitive Comparison

For the Other Industrial Metals & Mining subindustry, Rio Tinto's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Rio Tinto Beneish M-Score Distribution

For the Metals & Mining industry and Basic Materials sector, Rio Tinto's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Rio Tinto's Beneish M-Score falls into.



Rio Tinto Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Rio Tinto 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 * 0.6192+0.528 * 0.9226+0.404 * 0.9318+0.892 * 1.4233+0.115 * 0.9455
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.102+4.679 * -0.0413-0.327 * 0.9529
=-2.72

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Dec21) TTM:Last Year (Dec20) TTM:
Total Receivables was $2,241 Mil.
Revenue was $63,495 Mil.
Gross Profit was $44,934 Mil.
Total Current Assets was $24,432 Mil.
Total Assets was $102,896 Mil.
Property, Plant and Equipment(Net PPE) was $65,290 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,697 Mil.
Selling, General, & Admin. Expense(SGA) was $3,275 Mil.
Total Current Liabilities was $12,627 Mil.
Long-Term Debt & Capital Lease Obligation was $12,395 Mil.
Net Income was $21,094 Mil.
Gross Profit was $0 Mil.
Cash Flow from Operations was $25,345 Mil.
Total Receivables was $2,543 Mil.
Revenue was $44,611 Mil.
Gross Profit was $29,126 Mil.
Total Current Assets was $20,855 Mil.
Total Assets was $97,390 Mil.
Property, Plant and Equipment(Net PPE) was $63,153 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,279 Mil.
Selling, General, & Admin. Expense(SGA) was $2,088 Mil.
Total Current Liabilities was $11,607 Mil.
Long-Term Debt & Capital Lease Obligation was $13,247 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(2241 / 63495) / (2543 / 44611)
=0.03529412 / 0.05700388
=0.6192

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)
=(29126 / 44611) / (44934 / 63495)
=0.6528883 / 0.70767777
=0.9226

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (24432 + 65290) / 102896) / (1 - (20855 + 63153) / 97390)
=0.12803219 / 0.1374063
=0.9318

4. SGI = Sales Growth Index

Ratio of Revenue 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
=63495 / 44611
=1.4233

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(4279 / (4279 + 63153)) / (4697 / (4697 + 65290))
=0.06345652 / 0.06711246
=0.9455

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(3275 / 63495) / (2088 / 44611)
=0.05157886 / 0.0468046
=1.102

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((12395 + 12627) / 102896) / ((13247 + 11607) / 97390)
=0.24317758 / 0.25520074
=0.9529

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
=(21094 - 0 - 25345) / 102896
=-0.0413

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Rio Tinto has a M-score of -2.72 suggests that the company is unlikely to be a manipulator.


Rio Tinto Beneish M-Score Related Terms

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Rio Tinto Business Description

Rio Tinto logo
Address
6 St James’s Square, London, GBR, SW1Y 4AD
Rio Tinto searches for and extracts a variety of minerals worldwide, with the heaviest concentrations in North America and Australia. Iron ore is the dominant commodity, with significantly lesser contributions from aluminium, copper, diamonds, gold, and industrial minerals. The 1995 merger of RTZ and CRA, via a dual-listed structure, created the present-day company. The two operate as a single business entity. Shareholders in each company have equivalent economic and voting rights.

Rio Tinto Headlines

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