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GuruFocus has detected 3 Warning Signs with Trimble Inc $TRMB.
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Trimble Inc (NAS:TRMB)
Beneish M-Score
-2.77 (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.

Trimble Inc has a M-score of -2.77 suggests that the company is not a manipulator.

TRMB' s Beneish M-Score Range Over the Past 10 Years
Min: -4.97   Max: 2.27
Current: -2.77

-4.97
2.27

During the past 13 years, the highest Beneish M-Score of Trimble Inc was 2.27. The lowest was -4.97. And the median was -2.56.


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 Trimble 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 * 1.0001+0.528 * 0.9881+0.404 * 0.9329+0.892 * 1.0447+0.115 * 1.0057
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9557+4.679 * -0.0675-0.327 * 0.9642
=-2.77

* 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 $395 Mil.
Revenue was 613.9 + 585.5 + 584.1 + 609.6 = $2,393 Mil.
Gross Profit was 326.6 + 312.8 + 309 + 315.6 = $1,264 Mil.
Total Current Assets was $1,116 Mil.
Total Assets was $3,897 Mil.
Property, Plant and Equipment(Net PPE) was $143 Mil.
Depreciation, Depletion and Amortization(DDA) was $181 Mil.
Selling, General & Admin. Expense(SGA) was $633 Mil.
Total Current Liabilities was $759 Mil.
Long-Term Debt was $510 Mil.
Net Income was 50.5 + 37.7 + 39.2 + 35.7 = $163 Mil.
Non Operating Income was 15.1 + 7.6 + 3.5 + 4.4 = $31 Mil.
Cash Flow from Operations was 102.9 + 125.1 + 89.5 + 78.1 = $396 Mil.
Accounts Receivable was $378 Mil.
Revenue was 583 + 559.7 + 562.3 + 585.8 = $2,291 Mil.
Gross Profit was 300.6 + 293.1 + 298 + 303.9 = $1,196 Mil.
Total Current Assets was $873 Mil.
Total Assets was $3,750 Mil.
Property, Plant and Equipment(Net PPE) was $155 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $634 Mil.
Total Current Liabilities was $727 Mil.
Long-Term Debt was $540 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)
=(394.7 / 2393.1) / (377.8 / 2290.8)
=0.16493251 / 0.16492055
=1.0001

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)
=(1195.6 / 2290.8) / (1264 / 2393.1)
=0.52191374 / 0.5281852
=0.9881

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 - (1115.5 + 142.8) / 3897.4) / (1 - (872.6 + 155.4) / 3749.9)
=0.67714374 / 0.72585936
=0.9329

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
=2393.1 / 2290.8
=1.0447

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))
=(199.1 / (199.1 + 155.4)) / (180.6 / (180.6 + 142.8))
=0.56163611 / 0.55844156
=1.0057

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)
=(632.7 / 2393.1) / (633.7 / 2290.8)
=0.26438511 / 0.27662825
=0.9557

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)
=((509.8 + 759.3) / 3897.4) / ((539.6 + 726.8) / 3749.9)
=0.32562734 / 0.33771567
=0.9642

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
=(163.1 - 30.6 - 395.6) / 3897.4
=-0.0675

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.

Trimble Inc has a M-score of -2.77 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.

Trimble Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.04210.7831.16880.95870.97210.95530.92361.02321.04560.9506
GMI 0.9781.02681.00030.97870.98870.9840.97470.97641.02661.0015
AQI 1.26291.0070.95331.01591.1861.05270.99770.98641.02020.9385
SGI 1.30011.08750.84731.14891.27061.24091.12161.04690.95611.0313
DEPI 0.68910.93050.91131.0270.95271.03721.06431.03820.9880.9824
SGAI 1.01230.95661.18170.99851.00350.96570.98881.0731.0380.9753
LVGI 1.06251.13670.93131.01111.58911.12750.85870.98341.05840.9275
TATA -0.0508-0.0253-0.0764-0.0185-0.0412-0.0527-0.058-0.0563-0.0698-0.0807
M-score -2.37-2.75-2.86-2.48-2.59-2.57-2.67-2.70-2.81-2.87

Trimble Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.02320.9480.97061.01811.04561.0221.0631.05250.95061.0001
GMI 0.97640.99391.02411.03511.02661.02611.00981.00431.00150.9881
AQI 0.98641.00521.04731.01011.02021.01140.98160.96710.93850.9329
SGI 1.04691.01570.96440.94390.95610.96520.9991.01831.03131.0447
DEPI 1.03821.01441.00481.00520.9880.98670.970.97340.98241.0057
SGAI 1.0731.08041.10810.93071.0381.02410.98831.05240.97530.9557
LVGI 0.98341.03961.06271.10761.05841.04391.09380.93690.92750.9642
TATA -0.0563-0.071-0.0764-0.0658-0.0698-0.0729-0.0648-0.0691-0.0807-0.0675
M-score -2.70-2.87-2.90-2.82-2.81-2.83-2.76-2.74-2.87-2.77
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