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Alexandria Real Estate Equities Inc (NYSE:ARE)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

ARE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.64   Max: -1.17
Current: -2.57

-3.64
-1.17

During the past 13 years, the highest Beneish M-Score of Alexandria Real Estate Equities Inc was -1.17. The lowest was -3.64. And the median was -2.47.


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 * 0.8536+0.528 * 1+0.404 * 1.1805+0.892 * 1.161+0.115 * 0.9453
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9731+4.679 * -0.0424-0.327 * 0.9032
=-2.57

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $9.2 Mil.
Revenue was 200.905 + 190.837 + 209.802 + 190.931 = $792.5 Mil.
Gross Profit was 200.905 + 190.837 + 209.802 + 190.931 = $792.5 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $9,144.8 Mil.
Property, Plant and Equipment(Net PPE) was $7,774.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $275.1 Mil.
Selling, General & Admin. Expense(SGA) was $331.7 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,667.8 Mil.
Net Income was -111.616 + 5.936 + 42.005 + 39.529 = $-24.1 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 70.326 + 101.782 + 96.2 + 95.011 = $363.3 Mil.
Accounts Receivable was $9.3 Mil.
Revenue was 177.488 + 173.517 + 166.486 + 165.06 = $682.6 Mil.
Gross Profit was 177.488 + 173.517 + 166.486 + 165.06 = $682.6 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $8,524.9 Mil.
Property, Plant and Equipment(Net PPE) was $7,442.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $248.5 Mil.
Selling, General & Admin. Expense(SGA) was $293.6 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt was $1,721.4 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)
=(9.196 / 792.475) / (9.279 / 682.551)
=0.01160415 / 0.01359459
=0.8536

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)
=(682.551 / 682.551) / (792.475 / 792.475)
=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 + 7774.608) / 9144.83) / (1 - (0 + 7442.875) / 8524.891)
=0.1498357 / 0.12692432
=1.1805

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
=792.475 / 682.551
=1.161

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))
=(248.488 / (248.488 + 7442.875)) / (275.114 / (275.114 + 7774.608))
=0.03230741 / 0.03417683
=0.9453

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)
=(331.738 / 792.475) / (293.623 / 682.551)
=0.41861005 / 0.4301847
=0.9731

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)
=((1667.824 + 0) / 9144.83) / ((1721.435 + 0) / 8524.891)
=0.1823789 / 0.20193044
=0.9032

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
=(-24.146 - 0 - 363.319) / 9144.83
=-0.0424

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 -2.57 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 1.0780.80.80770.55721.34421.12971.10041.07730.92492.2144
GMI 1111111111
AQI 0.78830.92991.04870.96371.0191.10221.17930.98531.11871.2717
SGI 1.23251.33461.1821.08531.04711.20561.02651.08961.14981.1608
DEPI 1.22521.02980.98590.97931.01090.8870.88311.07810.9060.9196
SGAI 1.00063.72840.95980.98391.01521.0441.03240.98070.99831.0136
LVGI 0.94011.07290.95330.87920.86930.96620.68351.31310.52710.9921
TATA -0.0152-0.0164-0.0272-0.0131-0.0142-0.0176-0.0284-0.0234-0.0286-0.0223
M-score -2.31-2.96-2.58-2.85-2.14-2.23-2.34-2.53-2.36-1.22

Alexandria Real Estate Equities Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.03671.28071.12440.9560.9150.74980.80522.14260.78510.8536
GMI 1111111111
AQI 1.05480.8011.01371.11871.13661.26281.20851.27171.1331.1805
SGI 1.10611.09791.11091.11251.09371.16161.1611.19981.1961.161
DEPI 1.11021.09080.97090.9060.88930.80390.9330.91960.90390.9453
SGAI 0.96830.9670.98711.00361.02081.02611.0311.00830.99160.9731
LVGI 0.74590.54730.51760.52710.94340.91990.98160.99210.95080.9032
TATA -0.0248-0.0214-0.0227-0.0289-0.0338-0.0295-0.0264-0.0223-0.0236-0.0424
M-score -2.34-2.15-2.21-2.36-2.58-2.60-2.56-1.25-2.55-2.57
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