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Alexandria Real Estate Equities Inc (NYSE:ARE)
Beneish M-Score
-2.56 (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.

Alexandria Real Estate Equities Inc has a M-score of -2.56 suggests that the company is not a manipulator.

ARE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.64   Max: -0.67
Current: -2.56

-3.64
-0.67

During the past 13 years, the highest Beneish M-Score of Alexandria Real Estate Equities Inc was -0.67. The lowest was -3.64. And the median was -2.46.


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 Alexandria Real Estate Equities 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 * 0.8122+0.528 * 1+0.404 * 1.133+0.892 * 1.1562+0.115 * 0.9039
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9986+4.679 * -0.0236-0.327 * 0.9508
=-2.56

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $10.0 Mil.
Revenue was 190.837 + 209.802 + 190.931 + 177.488 = $769.1 Mil.
Gross Profit was 190.837 + 209.802 + 190.931 + 177.488 = $769.1 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $8,971.5 Mil.
Property, Plant and Equipment(Net PPE) was $7,741.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $267.1 Mil.
Selling, General & Admin. Expense(SGA) was $326.3 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,761.2 Mil.
Net Income was 5.936 + 42.005 + 39.529 + 38.167 = $125.6 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 101.782 + 96.2 + 95.011 + 44.559 = $337.6 Mil.
Accounts Receivable was $10.6 Mil.
Revenue was 174.091 + 167.04 + 165.06 + 158.969 = $665.2 Mil.
Gross Profit was 174.091 + 167.04 + 165.06 + 158.969 = $665.2 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $8,405.2 Mil.
Property, Plant and Equipment(Net PPE) was $7,388.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $229.6 Mil.
Selling, General & Admin. Expense(SGA) was $282.6 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,735.5 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)
=(9.979 / 769.058) / (10.627 / 665.16)
=0.01297561 / 0.01597661
=0.8122

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)
=(665.16 / 665.16) / (769.058 / 769.058)
=1 / 1
=1

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 - (0 + 7741.466) / 8971.532) / (1 - (0 + 7388.059) / 8405.221)
=0.13710769 / 0.1210155
=1.133

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
=769.058 / 665.16
=1.1562

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))
=(229.633 / (229.633 + 7388.059)) / (267.076 / (267.076 + 7741.466))
=0.03014469 / 0.03334889
=0.9039

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)
=(326.268 / 769.058) / (282.573 / 665.16)
=0.42424369 / 0.42481959
=0.9986

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)
=((1761.215 + 0) / 8971.532) / ((1735.476 + 0) / 8405.221)
=0.19631151 / 0.20647595
=0.9508

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
=(125.637 - 0 - 337.552) / 8971.532
=-0.0236

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.

Alexandria Real Estate Equities Inc has a M-score of -2.56 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 own currency.

Alexandria Real Estate Equities Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.05540.82680.79250.57891.34421.12971.10041.07732.74840.7452
GMI 1111111111
AQI 0.78830.92991.04870.96371.0191.10221.17930.98531.25131.137
SGI 1.25891.29141.20481.04451.04711.20561.02651.08961.14981.1608
DEPI 1.22521.05160.96550.97931.01090.8870.88311.07810.89290.9332
SGAI 0.98170.9643.81921.00511.01521.0441.03240.98070.99831.0136
LVGI 0.94011.07290.95330.87920.86930.8081.03480.65660.83260.9921
TATA -0.0152-0.0197-0.0214-0.0131-0.0142-0.0176-0.0284-0.0234-0.0286-0.0223
M-score -2.31-2.51-3.04-2.87-2.14-2.18-2.45-2.32-0.73-2.63

Alexandria Real Estate Equities Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.01530.97471.26761.11752.84860.91660.77610.83280.74530.8122
GMI 1111111111
AQI 0.98531.05480.8011.01371.25131.13661.26281.20851.1371.133
SGI 1.15611.17631.10931.11771.10941.09181.12221.12251.16071.1562
DEPI 1.06061.09261.16250.96660.89290.88930.85170.9330.93320.9039
SGAI 0.96110.95290.96050.98231.00321.01931.03041.03561.01370.9986
LVGI 0.65660.74590.54730.51760.83260.94340.91990.98160.99210.9508
TATA -0.0231-0.0245-0.021-0.0224-0.0286-0.0335-0.0295-0.0264-0.0223-0.0236
M-score -2.31-2.34-2.14-2.21-0.67-2.57-2.60-2.57-2.63-2.56
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