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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.
During the past 13 years, the highest Beneish M-Score of Boston Properties Inc was -1.99. The lowest was -2.97. And the median was -2.50.
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 Boston Properties 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 * 0.6999||+||0.528 * 0.9965||+||0.404 * 1.0092||+||0.892 * 1.1195||+||0.115 * 0.8959|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8195||+||4.679 * -0.0128||-||0.327 * 0.9447|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $47 Mil.|
Revenue was 613.707 + 618.803 + 589.794 + 574.694 = $2,397 Mil.
Gross Profit was 395.091 + 396.039 + 379.833 + 361.509 = $1,532 Mil.
Total Current Assets was $3,008 Mil.
Total Assets was $19,887 Mil.
Property, Plant and Equipment(Net PPE) was $15,689 Mil.
Depreciation, Depletion and Amortization(DDA) was $629 Mil.
Selling, General & Admin. Expense(SGA) was $102 Mil.
Total Current Liabilities was $1,289 Mil.
Long-Term Debt was $10,087 Mil.
Net Income was 177.285 + 130.371 + 79.145 + 56.623 = $443 Mil.
Non Operating Income was -7.546 + 4.122 + 3.496 + 3.102 = $3 Mil.
Cash Flow from Operations was 225.876 + 160.684 + 184.784 + 124.209 = $696 Mil.
|Accounts Receivable was $59 Mil.
Revenue was 568.705 + 574.082 + 515.32 + 483.014 = $2,141 Mil.
Gross Profit was 365.473 + 367.152 + 328.148 + 303.35 = $1,364 Mil.
Total Current Assets was $3,150 Mil.
Total Assets was $20,162 Mil.
Property, Plant and Equipment(Net PPE) was $15,817 Mil.
Depreciation, Depletion and Amortization(DDA) was $565 Mil.
Selling, General & Admin. Expense(SGA) was $111 Mil.
Total Current Liabilities was $867 Mil.
Long-Term Debt was $11,342 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(46.595 / 2396.998)||/||(59.464 / 2141.121)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(396.039 / 2141.121)||/||(395.091 / 2396.998)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (3008.453 + 15688.744) / 19886.767)||/||(1 - (3150.046 + 15817.194) / 20162.251)|
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.
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))|
|=||(565.397 / (565.397 + 15817.194))||/||(628.573 / (628.573 + 15688.744))|
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)|
|=||(102.077 / 2396.998)||/||(111.262 / 2141.121)|
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)|
|=||((10086.984 + 1289.267) / 19886.767)||/||((11341.508 + 867.235) / 20162.251)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(443.424 - 3.174||-||695.553)||/||19886.767|
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.
Boston Properties Inc has a M-score of -2.67 suggests that the company will not be a manipulator.
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
Boston Properties Inc Annual Data
Boston Properties Inc Quarterly Data