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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 CBRE Group Inc was -1.97. The lowest was -4.00. 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 CBRE Group 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 * 1.0343||+||0.528 * 1.0733||+||0.404 * 0.9193||+||0.892 * 1.2213||+||0.115 * 0.9025|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9264||+||4.679 * -0.0519||-||0.327 * 1.0496|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,609 Mil.|
Revenue was 2275.076 + 2126.806 + 1860.842 + 2233.851 = $8,497 Mil.
Gross Profit was 846.09 + 812.333 + 699.382 + 956.853 = $3,315 Mil.
Total Current Assets was $3,461 Mil.
Total Assets was $7,530 Mil.
Property, Plant and Equipment(Net PPE) was $456 Mil.
Depreciation, Depletion and Amortization(DDA) was $249 Mil.
Selling, General & Admin. Expense(SGA) was $2,334 Mil.
Total Current Liabilities was $2,677 Mil.
Long-Term Debt was $2,084 Mil.
Net Income was 107.099 + 105.464 + 67.663 + 114.646 = $395 Mil.
Non Operating Income was 20.1 + 15.628 + 19.801 + 151.543 = $207 Mil.
Cash Flow from Operations was 292.462 + 45.982 + -269.966 + 510.468 = $579 Mil.
|Accounts Receivable was $1,273 Mil.
Revenue was 1733.866 + 1742.014 + 1475.063 + 2005.846 = $6,957 Mil.
Gross Profit was 701.518 + 723.187 + 613.847 + 874.276 = $2,913 Mil.
Total Current Assets was $2,559 Mil.
Total Assets was $6,177 Mil.
Property, Plant and Equipment(Net PPE) was $394 Mil.
Depreciation, Depletion and Amortization(DDA) was $184 Mil.
Selling, General & Admin. Expense(SGA) was $2,063 Mil.
Total Current Liabilities was $1,843 Mil.
Long-Term Debt was $1,879 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)|
|=||(1608.628 / 8496.575)||/||(1273.38 / 6956.789)|
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)|
|=||(812.333 / 6956.789)||/||(846.09 / 8496.575)|
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 - (3461.037 + 455.859) / 7529.954)||/||(1 - (2558.96 + 394.263) / 6177.335)|
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))|
|=||(184.286 / (184.286 + 394.263))||/||(248.651 / (248.651 + 455.859))|
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)|
|=||(2334.319 / 8496.575)||/||(2063.067 / 6956.789)|
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)|
|=||((2084.213 + 2677.009) / 7529.954)||/||((1878.521 + 1842.727) / 6177.335)|
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|
|=||(394.872 - 207.072||-||578.946)||/||7529.954|
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.
CBRE Group Inc has a M-score of -2.50 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
CBRE Group Inc Annual Data
CBRE Group Inc Quarterly Data