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Trex Co (Trex Co) Beneish M-Score : -3.85 (As of Apr. 26, 2024)


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What is Trex Co Beneish M-Score?

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 -3.85 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

TREX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.85   Med: -2.59   Max: -0.99
Current: -3.85

During the past 13 years, the highest Beneish M-Score of Trex Co was -0.99. The lowest was -3.85. And the median was -2.59.


Trex Co Beneish M-Score Historical Data

The historical data trend for Trex Co'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.

Trex Co Beneish M-Score Chart

Trex Co Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.59 -2.24 -2.40 -3.30 -3.85

Trex Co Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Beneish M-Score Get a 7-Day Free Trial 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 -3.30 -1.71 -1.94 -1.63 -3.85

Competitive Comparison of Trex Co's Beneish M-Score

For the Building Products & Equipment subindustry, Trex Co'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.


Trex Co's Beneish M-Score Distribution in the Construction Industry

For the Construction industry and Industrials sector, Trex Co's Beneish M-Score distribution charts can be found below:

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



Trex Co 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 Trex Co 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 * 0.4201+0.528 * 0.8839+0.404 * 0.9629+0.892 * 0.9899+0.115 * 1.0427
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2551+4.679 * -0.197276-0.327 * 0.3497
=-3.85

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was $51 Mil.
Revenue was 195.745 + 303.836 + 356.538 + 238.718 = $1,095 Mil.
Gross Profit was 70.636 + 130.895 + 156.448 + 94.428 = $452 Mil.
Total Current Assets was $172 Mil.
Total Assets was $933 Mil.
Property, Plant and Equipment(Net PPE) was $736 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General, & Admin. Expense(SGA) was $176 Mil.
Total Current Liabilities was $91 Mil.
Long-Term Debt & Capital Lease Obligation was $19 Mil.
Net Income was 21.951 + 65.266 + 77.036 + 41.131 = $205 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 101.195 + 180.444 + 223.252 + -115.471 = $389 Mil.
Total Receivables was $122 Mil.
Revenue was 192.093 + 188.472 + 386.249 + 339.228 = $1,106 Mil.
Gross Profit was 65.491 + 46.208 + 157.377 + 134.912 = $404 Mil.
Total Current Assets was $287 Mil.
Total Assets was $934 Mil.
Property, Plant and Equipment(Net PPE) was $621 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General, & Admin. Expense(SGA) was $142 Mil.
Total Current Liabilities was $291 Mil.
Long-Term Debt & Capital Lease Obligation was $24 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)
=(50.747 / 1094.837) / (122.036 / 1106.042)
=0.046351 / 0.110336
=0.4201

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)
=(403.988 / 1106.042) / (452.407 / 1094.837)
=0.365256 / 0.413219
=0.8839

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 - (172.254 + 735.635) / 932.885) / (1 - (286.842 + 620.883) / 933.705)
=0.026794 / 0.027825
=0.9629

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
=1094.837 / 1106.042
=0.9899

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))
=(44.298 / (44.298 + 620.883)) / (50.189 / (50.189 + 735.635))
=0.066595 / 0.063868
=1.0427

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)
=(176.202 / 1094.837) / (141.829 / 1106.042)
=0.160939 / 0.128231
=1.2551

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)
=((18.84 + 91.062) / 932.885) / ((23.974 + 290.599) / 933.705)
=0.117809 / 0.336908
=0.3497

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
=(205.384 - 0 - 389.42) / 932.885
=-0.197276

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.

Trex Co has a M-score of -3.85 suggests that the company is unlikely to be a manipulator.


Trex Co Beneish M-Score Related Terms

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Trex Co (Trex Co) Business Description

Traded in Other Exchanges
Address
160 Exeter Drive, Winchester, VA, USA, 22603-8605
Trex Co Inc is a manufacturer of wooden alternative-decking products. The company offers outdoor products in the decking, railing, porch, fencing, trim, steel deck framing, and outdoor lighting categories. Its products are sold under the Trex brand and manufactured in the United States. Further, the company licenses its Trex brand to third parties to manufacture and sell products under the Trex trademark. The distribution is focused on wholesale distributors and retail lumber dealers, which in turn sell Trex products to homeowners and contractors, with an emphasis on professional contractors, remodelers, and homebuilders. The company operates in two reportable segments Trex Residential and Trex Commercial. The majority of revenue is derived from the Trex Residential segment.
Executives
Brenda Lovcik officer: SVP, Chief Financial Officer 2500 TREX WAY, C/O TREX COMPANY, INC., WINCHESTER VA 22601
Amy M. Fernandez officer: VP, GC and Secretary 2500 TREX WAY, WINCHESTER VA 22601
Melkeya Mcduffie director C/O CLEAN HARBORS INC., 42 LONGWATER DRIVE, NORWELL MA 02061
Michael F Golden director 2100 ROOSEVELT AVENUE, SPRINGFIELD MA 01104
Bryan Horix Fairbanks officer: VP and CFO 160 EXETER DRIVE, WINCHESTER VA 22603
Adam Dante Zambanini officer: Vice President, Marketing C/O TREX COMPANY INC., 160 EXETER DRIVE, WINCHESTER VA 22603
William R. Gupp officer: V.P. & General Counsel C/O TREX COMPANY, 160 EXETER DRIVE, WINCHESTER VA 22603
Dennis Charles Schemm officer: VP and Chief Financial Officer CONTINENTAL BUILDING PRODUCTS, 12950 WORLDGATE DRIVE, HERNDON VA 20170
Richard E Posey director C/O TREX COMPANY INC., 160 EXETER DRIVE, WINCHESTER VA 22603
Patricia B Robinson director
James E Cline officer: Vice President and CFO C/O TREX COMPANY INC., 160 EXETER DRIVE, WINCHESTER VA 22603
Jay M Gratz director RYERSON INC, 2621 W 15TH PLACE, CHICAGO IL 60608
Gena C Lovett director 11324 FOX CREEK FARM WAY, GREAT FALLS VA 22066
Christopher Paul Gerhard officer: Vice President, Sales 160 EXETER DRIVE, WINCHESTER VA 22603
Kristine L Juster director 1600 ROYAL ST, JASPER IN 47549