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GuruFocus has detected 8 Warning Signs with Apartment Investment & Management Co $AIV.
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Apartment Investment & Management Co (NYSE:AIV)
Beneish M-Score
-2.54 (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.

Apartment Investment & Management Co has a M-score of -2.54 suggests that the company is not a manipulator.

AIV' s Beneish M-Score Range Over the Past 10 Years
Min: -35.87   Max: -2.01
Current: -2.54

-35.87
-2.01

During the past 13 years, the highest Beneish M-Score of Apartment Investment & Management Co was -2.01. The lowest was -35.87. And the median was -2.66.


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 Apartment Investment & Management 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 * 1+0.528 * 0.9782+0.404 * 0.7529+0.892 * 1.0148+0.115 * 0.9595
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0255+4.679 * 0.0075-0.327 * 0.9624
=-2.54

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $0.0 Mil.
Revenue was 249.493 + 248.904 + 251.218 + 246.239 = $995.9 Mil.
Gross Profit was 163.888 + 156.443 + 161.896 + 156.867 = $639.1 Mil.
Total Current Assets was $131.2 Mil.
Total Assets was $6,232.8 Mil.
Property, Plant and Equipment(Net PPE) was $5,755.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $333.1 Mil.
Selling, General & Admin. Expense(SGA) was $44.9 Mil.
Total Current Liabilities was $298.4 Mil.
Long-Term Debt was $3,884.6 Mil.
Net Income was 164.407 + 15.513 + 224.433 + 26.057 = $430.4 Mil.
Non Operating Income was 0.53 + 0.558 + 4.906 + 0.077 = $6.1 Mil.
Cash Flow from Operations was 101.268 + 99.691 + 102.812 + 73.953 = $377.7 Mil.
Accounts Receivable was $0.0 Mil.
Revenue was 245.875 + 246.387 + 244.783 + 244.265 = $981.3 Mil.
Gross Profit was 157.264 + 155.861 + 155.767 + 147.17 = $616.1 Mil.
Total Current Assets was $137.7 Mil.
Total Assets was $6,118.7 Mil.
Property, Plant and Equipment(Net PPE) was $5,529.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $306.3 Mil.
Selling, General & Admin. Expense(SGA) was $43.2 Mil.
Total Current Liabilities was $417.7 Mil.
Long-Term Debt was $3,849.1 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)
=(0 / 995.854) / (0 / 981.31)
=0 / 0
=1

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)
=(616.062 / 981.31) / (639.094 / 995.854)
=0.6277955 / 0.64175472
=0.9782

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 - (131.15 + 5755.408) / 6232.818) / (1 - (137.745 + 5529.461) / 6118.681)
=0.05555433 / 0.07378633
=0.7529

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
=995.854 / 981.31
=1.0148

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))
=(306.301 / (306.301 + 5529.461)) / (333.066 / (333.066 + 5755.408))
=0.05248689 / 0.05470435
=0.9595

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)
=(44.937 / 995.854) / (43.178 / 981.31)
=0.04512408 / 0.04400037
=1.0255

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)
=((3884.632 + 298.361) / 6232.818) / ((3849.141 + 417.656) / 6118.681)
=0.67112388 / 0.69733934
=0.9624

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
=(430.41 - 6.071 - 377.724) / 6232.818
=0.0075

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.

Apartment Investment & Management Co has a M-score of -2.54 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.

Apartment Investment & Management Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.16210.93990.7280.98340.878901111
GMI 01.77441.02680.97570.95540.96690.97880.99480.97640.9782
AQI 1.72310.6910.57941.14131.19821.0420.56830.9940.89290.7529
SGI 0.85960.90290.90990.84740.95391.04831.01621.01060.99691.0148
DEPI 1.10630.72180.98121.03741.00361.00881.27461.0460.93550.9595
SGAI 1.171.21120.62781.1120.99980.92950.9060.95530.98231.0255
LVGI 0.011103.23761.03431.01451.07140.98270.98370.93750.93690.9624
TATA -0.0405-0.0109-0.0363-0.0428-0.0438-0.0315-0.0199-0.0019-0.01820.0075
M-score -2.58-35.89-3.09-2.81-2.80-3.49-2.69-2.45-2.61-2.54

Apartment Investment & Management Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0111111111
GMI 0.99320.99480.99090.98510.97390.97640.96580.97210.9830.9782
AQI 0.75560.9940.89690.8120.92090.89290.98740.79280.75390.7529
SGI 1.0591.01060.99410.98780.98450.99691.00371.01191.0151.0148
DEPI 1.12251.0461.01951.03181.00740.93550.93080.90580.94980.9595
SGAI 0.88420.95531.00131.07711.09680.98231.00190.93460.93111.0255
LVGI 0.90040.93750.86980.90260.95180.93691.02020.9840.98750.9624
TATA -0.0103-0.0242-0.0103-0.0022-0.0206-0.0182-0.0303-0.0064-0.00760.0075
M-score -3.43-2.56-2.54-2.56-2.64-2.61-2.66-2.59-2.60-2.54
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