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RUM Group earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score49 / 100 · grade D · rank 897 of 1027

RUM Group (RUM) scores 49 of 100 for earnings quality, grade D: rank 897 of 1027 companies and 178 of 203 in technology. It loses the most points on Beneish M-score 0.75: flagged (above −1.78), Montier C-score 4 of 5 checks failed, discretionary accruals of +18.5% of assets (modified Jones), larger than most. It earns full or near-full marks for adjusted earnings 5% below GAAP, Dechow F-score 0.33 (normal), profit about as variable as cash flow (smoothness 4.51).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -4.3% of assets, lower than 52% of companies (profit backed by cash)1020
Beneish M-scoreBeneish M-score 0.75: flagged (above −1.78)015
Dechow F-scoreDechow F-score 0.33 (normal)1515
Montier C-scoreMontier C-score 4 of 5 checks failed315
Discretionary accrualsdiscretionary accruals of +18.5% of assets (modified Jones), larger than most010
Piotroski F-scorePiotroski F-score 6 of 9710
Non-GAAP gapadjusted earnings 5% below GAAP810
Earnings smoothnessprofit about as variable as cash flow (smoothness 4.51)55
RUM: share of the available points, by componentRUM: share of the available points, by componentAccruals52%Discretionary accruals3%Dechow F-score100%Montier C-score20%Piotroski F-score67%Non-GAAP gap82%Earnings smoothness100%

How the score is built

Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.

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Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.