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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 -1.43. The lowest was -4.05. And the median was -2.41.
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 * 1.3941||+||0.528 * 1.2311||+||0.404 * 0.9039||+||0.892 * 1.3023||+||0.115 * 0.9012|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8788||+||4.679 * -0.0202||-||0.327 * 1.0127|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $4,130 Mil.|
Revenue was 3193.487 + 3207.537 + 2846.734 + 3700.242 = $12,948 Mil.
Gross Profit was 940.704 + 953.304 + 833.121 + 1169.721 = $3,897 Mil.
Total Current Assets was $5,055 Mil.
Total Assets was $10,777 Mil.
Property, Plant and Equipment(Net PPE) was $551 Mil.
Depreciation, Depletion and Amortization(DDA) was $369 Mil.
Selling, General & Admin. Expense(SGA) was $2,875 Mil.
Total Current Liabilities was $4,567 Mil.
Long-Term Debt was $2,615 Mil.
Net Income was 104.163 + 121.668 + 82.167 + 180.043 = $488 Mil.
Non Operating Income was 26.028 + 38.811 + 60.516 + 124.581 = $250 Mil.
Cash Flow from Operations was 156.828 + 118.623 + -328.64 + 509.487 = $456 Mil.
|Accounts Receivable was $2,275 Mil.
Revenue was 2712.559 + 2390.506 + 2052.503 + 2787.194 = $9,943 Mil.
Gross Profit was 938.899 + 902.532 + 761.726 + 1080.851 = $3,684 Mil.
Total Current Assets was $3,980 Mil.
Total Assets was $9,555 Mil.
Property, Plant and Equipment(Net PPE) was $504 Mil.
Depreciation, Depletion and Amortization(DDA) was $285 Mil.
Selling, General & Admin. Expense(SGA) was $2,512 Mil.
Total Current Liabilities was $3,604 Mil.
Long-Term Debt was $2,684 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)|
|=||(4130.115 / 12948)||/||(2275.025 / 9942.762)|
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)|
|=||(3684.008 / 9942.762)||/||(3896.85 / 12948)|
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 - (5055.477 + 550.779) / 10776.77)||/||(1 - (3979.647 + 503.666) / 9555.464)|
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))|
|=||(284.942 / (284.942 + 503.666))||/||(368.585 / (368.585 + 550.779))|
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)|
|=||(2875.109 / 12948)||/||(2512.175 / 9942.762)|
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)|
|=||((2614.898 + 4566.864) / 10776.77)||/||((2683.718 + 3604.263) / 9555.464)|
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|
|=||(488.041 - 249.936||-||456.298)||/||10776.77|
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 -1.85 signals that the company is likely to 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