Switch to:
GuruFocus has detected 2 Warning Signs with Tesco Corp $TESO.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Tesco Corp (NAS:TESO)
Beneish M-Score
-3.84 (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.

Tesco Corp has a M-score of -3.84 suggests that the company is not a manipulator.

TESO' s Beneish M-Score Range Over the Past 10 Years
Min: -6.79   Max: -0.76
Current: -3.84

-6.79
-0.76

During the past 13 years, the highest Beneish M-Score of Tesco Corp was -0.76. The lowest was -6.79. And the median was -2.33.


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 Tesco Corp 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 * 1.344+0.528 * 0.5931+0.404 * 0.438+0.892 * 0.6086+0.115 * 1.091
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3449+4.679 * -0.1816-0.327 * 0.9534
=-3.84

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $39.7 Mil.
Revenue was 36.745 + 35.283 + 30.415 + 33.586 = $136.0 Mil.
Gross Profit was -5.74 + -7.91 + -13.913 + -10.078 = $-37.6 Mil.
Total Current Assets was $214.1 Mil.
Total Assets was $331.9 Mil.
Property, Plant and Equipment(Net PPE) was $115.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $27.4 Mil.
Selling, General & Admin. Expense(SGA) was $30.3 Mil.
Total Current Liabilities was $32.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -13.694 + -20.149 + -22.069 + -18.871 = $-74.8 Mil.
Non Operating Income was 0.271 + -1.139 + -0.585 + -0.034 = $-1.5 Mil.
Cash Flow from Operations was -8.833 + 3.472 + -4.263 + -3.398 = $-13.0 Mil.
Accounts Receivable was $48.5 Mil.
Revenue was 35.453 + 52.22 + 61.397 + 74.451 = $223.5 Mil.
Gross Profit was -11.406 + -18.709 + -4.277 + -2.29 = $-36.7 Mil.
Total Current Assets was $218.4 Mil.
Total Assets was $360.5 Mil.
Property, Plant and Equipment(Net PPE) was $136.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $36.0 Mil.
Selling, General & Admin. Expense(SGA) was $37.0 Mil.
Total Current Liabilities was $37.5 Mil.
Long-Term Debt was $0.0 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)
=(39.694 / 136.029) / (48.532 / 223.521)
=0.29180542 / 0.21712501
=1.344

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)
=(-36.682 / 223.521) / (-37.641 / 136.029)
=-0.16410986 / -0.27671305
=0.5931

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 - (214.064 + 115.429) / 331.908) / (1 - (218.402 + 136.137) / 360.528)
=0.00727611 / 0.01661175
=0.438

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
=136.029 / 223.521
=0.6086

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))
=(35.994 / (35.994 + 136.137)) / (27.369 / (27.369 + 115.429))
=0.20910818 / 0.19166235
=1.091

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)
=(30.284 / 136.029) / (37.002 / 223.521)
=0.222629 / 0.16554149
=1.3449

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)
=((0 + 32.897) / 331.908) / ((0 + 37.479) / 360.528)
=0.09911481 / 0.10395586
=0.9534

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
=(-74.783 - -1.487 - -13.022) / 331.908
=-0.1816

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.

Tesco Corp has a M-score of -3.84 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 local exchange's currency.

Tesco Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.91260.96110.82771.27421.19081.03021.1380.88080.96961.0764
GMI 1.17960.89612.45070.54510.92990.93741.021.0546-3.33330.188
AQI 1.02490.83011.15620.94040.93770.9160.93861.10510.19620.4187
SGI 1.19731.15690.66711.06111.35471.07830.94891.03450.51520.4817
DEPI 1.0591.01340.82161.01241.03690.93651.01340.97660.97250.9041
SGAI 1.01740.96391.33611.01530.770.84081.17051.03981.52781.497
LVGI 1.03810.82530.54871.04831.46550.75090.98630.8480.68720.9336
TATA 0.0208-0.0544-0.1499-0.10310.01830.0569-0.0871-0.0194-0.2666-0.328
M-score -2.19-2.69-2.74-2.94-2.07-2.08-2.84-2.54-6.79-5.15

Tesco Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.88080.76230.79720.89370.96961.08341.08661.22411.07641.344
GMI 1.05461.20011.74263.5931-3.3333-1.0949-0.513-0.16650.1880.5931
AQI 1.10511.2171.06061.12930.19620.16960.15310.140.41870.438
SGI 1.03450.98860.82680.66430.51520.43550.41270.41890.48170.6086
DEPI 0.97660.95330.92530.92680.97250.84340.8780.90230.90411.091
SGAI 1.03981.00731.11891.32831.52781.68371.84141.72681.4971.3449
LVGI 0.8480.75220.69230.71210.68720.8310.73140.89950.93360.9534
TATA -0.0194-0.0391-0.0803-0.103-0.2666-0.4508-0.4013-0.4243-0.328-0.1816
M-score -2.54-2.62-2.71-1.91-6.79-6.54-6.01-5.84-5.15-3.84
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

FEEDBACK