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Alexandria Real Estate Equities Inc (NYSE:ARE)
Beneish M-Score
-2.63 (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 -2.63 suggests that the company is not a manipulator.

ARE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.02   Max: -0.67
Current: -2.63

-3.02
-0.67

During the past 13 years, the highest Beneish M-Score of Alexandria Real Estate Equities Inc was -0.67. The lowest was -3.02. And the median was -2.49.


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 * 0.7459+0.528 * 1+0.404 * 1.137+0.892 * 1.1599+0.115 * 0.9332
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0144+4.679 * -0.0223-0.327 * 0.9921
=-2.63

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $27.1 Mil.
Revenue was 209.802 + 190.931 + 177.488 + 173.517 = $751.7 Mil.
Gross Profit was 209.802 + 190.931 + 177.488 + 173.517 = $751.7 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $8,911.1 Mil.
Property, Plant and Equipment(Net PPE) was $7,643.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $255.2 Mil.
Selling, General & Admin. Expense(SGA) was $320.9 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,768.2 Mil.
Net Income was 42.005 + 39.529 + 38.167 + 24.516 = $144.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 96.2 + 95.011 + 44.559 + 106.841 = $342.6 Mil.
Accounts Receivable was $31.3 Mil.
Revenue was 167.04 + 165.06 + 158.969 + 157.063 = $648.1 Mil.
Gross Profit was 167.04 + 165.06 + 158.969 + 157.063 = $648.1 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $8,136.0 Mil.
Property, Plant and Equipment(Net PPE) was $7,118.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $221.3 Mil.
Selling, General & Admin. Expense(SGA) was $272.7 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,627.2 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)
=(27.115 / 751.738) / (31.343 / 648.132)
=0.03606975 / 0.04835898
=0.7459

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)
=(190.931 / 648.132) / (209.802 / 751.738)
=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 + 7643.604) / 8911.12) / (1 - (0 + 7118.167) / 8136.036)
=0.14223981 / 0.12510626
=1.137

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
=751.738 / 648.132
=1.1599

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))
=(221.251 / (221.251 + 7118.167)) / (255.171 / (255.171 + 7643.604))
=0.03014558 / 0.03230514
=0.9332

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)
=(320.853 / 751.738) / (272.694 / 648.132)
=0.42681493 / 0.42073837
=1.0144

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)
=((1768.217 + 0) / 8911.12) / ((1627.209 + 0) / 8136.036)
=0.19842814 / 0.20000022
=0.9921

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
=(144.217 - 0 - 342.611) / 8911.12
=-0.0223

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 -2.63 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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.73591.01530.97471.26761.11752.84860.91740.77670.83350.7459
GMI 1111111111
AQI 1.05990.98531.05480.8011.01371.25131.13661.26281.20851.137
SGI 1.16381.15611.17631.10931.11771.10941.09091.12131.12161.1599
DEPI 0.9711.06061.09261.16250.96660.89290.88930.85170.9330.9332
SGAI 0.97630.96110.95290.96050.98231.00321.02021.03131.03651.0144
LVGI 1.03240.65660.74590.54730.51760.83260.94340.91990.98160.9921
TATA -0.026-0.0231-0.0245-0.021-0.0224-0.0286-0.0335-0.0295-0.0264-0.0223
M-score -2.68-2.31-2.34-2.14-2.21-0.67-2.57-2.61-2.57-2.63
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