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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 5.84. The lowest was -3.39. And the median was -2.55.
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 * 1.0042||+||0.528 * 1.0009||+||0.404 * 0.9339||+||0.892 * 1.0702||+||0.115 * 0.9486|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9403||+||4.679 * -0.0147||-||0.327 * 0.9154|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $55 Mil.|
Revenue was 618.221 + 618.476 + 613.707 + 618.803 = $2,469 Mil.
Gross Profit was 395.262 + 389.55 + 395.091 + 396.039 = $1,576 Mil.
Total Current Assets was $2,402 Mil.
Total Assets was $19,114 Mil.
Property, Plant and Equipment(Net PPE) was $15,612 Mil.
Depreciation, Depletion and Amortization(DDA) was $642 Mil.
Selling, General & Admin. Expense(SGA) was $99 Mil.
Total Current Liabilities was $523 Mil.
Long-Term Debt was $9,867 Mil.
Net Income was 82.078 + 173.771 + 177.285 + 130.371 = $564 Mil.
Non Operating Income was 3.054 + 15.227 + -7.546 + 4.122 = $15 Mil.
Cash Flow from Operations was 241.63 + 201.446 + 225.876 + 160.684 = $830 Mil.
|Accounts Receivable was $51 Mil.
Revenue was 589.794 + 574.694 + 568.705 + 574.082 = $2,307 Mil.
Gross Profit was 379.833 + 361.509 + 365.473 + 367.152 = $1,474 Mil.
Total Current Assets was $1,840 Mil.
Total Assets was $18,899 Mil.
Property, Plant and Equipment(Net PPE) was $15,895 Mil.
Depreciation, Depletion and Amortization(DDA) was $619 Mil.
Selling, General & Admin. Expense(SGA) was $99 Mil.
Total Current Liabilities was $485 Mil.
Long-Term Debt was $10,739 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)|
|=||(55.183 / 2469.207)||/||(51.348 / 2307.275)|
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)|
|=||(389.55 / 2307.275)||/||(395.262 / 2469.207)|
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 - (2402.242 + 15612.331) / 19113.959)||/||(1 - (1839.686 + 15894.949) / 18898.533)|
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))|
|=||(618.5 / (618.5 + 15894.949))||/||(641.742 / (641.742 + 15612.331))|
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)|
|=||(99.413 / 2469.207)||/||(98.793 / 2307.275)|
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)|
|=||((9867.459 + 523.34) / 19113.959)||/||((10738.609 + 484.524) / 18898.533)|
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|
|=||(563.505 - 14.857||-||829.636)||/||19113.959|
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 -2.48 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