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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 -3.60. And the median was -2.47.
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 * 0.9273||+||0.528 * 1.0972||+||0.404 * 0.9063||+||0.892 * 1.2596||+||0.115 * 0.8471|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9202||+||4.679 * -0.0351||-||0.327 * 0.9674|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $1,736 Mil.|
Revenue was 2787.194 + 2275.076 + 2126.806 + 1860.842 = $9,050 Mil.
Gross Profit was 1080.851 + 846.09 + 812.333 + 699.382 = $3,439 Mil.
Total Current Assets was $3,525 Mil.
Total Assets was $7,647 Mil.
Property, Plant and Equipment(Net PPE) was $498 Mil.
Depreciation, Depletion and Amortization(DDA) was $265 Mil.
Selling, General & Admin. Expense(SGA) was $2,439 Mil.
Total Current Liabilities was $2,876 Mil.
Long-Term Debt was $1,852 Mil.
Net Income was 204.277 + 107.099 + 105.464 + 67.663 = $485 Mil.
Non Operating Income was 35.281 + 20.1 + 15.628 + 19.801 = $91 Mil.
Cash Flow from Operations was 593.302 + 292.462 + 45.982 + -269.966 = $662 Mil.
|Accounts Receivable was $1,486 Mil.
Revenue was 2233.851 + 1733.866 + 1742.014 + 1475.063 = $7,185 Mil.
Gross Profit was 956.853 + 701.518 + 723.187 + 613.847 = $2,995 Mil.
Total Current Assets was $2,880 Mil.
Total Assets was $6,998 Mil.
Property, Plant and Equipment(Net PPE) was $459 Mil.
Depreciation, Depletion and Amortization(DDA) was $191 Mil.
Selling, General & Admin. Expense(SGA) was $2,104 Mil.
Total Current Liabilities was $2,606 Mil.
Long-Term Debt was $1,867 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)|
|=||(1736.229 / 9049.918)||/||(1486.489 / 7184.794)|
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)|
|=||(846.09 / 7184.794)||/||(1080.851 / 9049.918)|
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 - (3524.504 + 497.926) / 7647.105)||/||(1 - (2879.812 + 458.596) / 6998.414)|
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))|
|=||(191.27 / (191.27 + 458.596))||/||(265.101 / (265.101 + 497.926))|
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)|
|=||(2438.96 / 9049.918)||/||(2104.31 / 7184.794)|
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)|
|=||((1852.416 + 2875.634) / 7647.105)||/||((1866.89 + 2605.74) / 6998.414)|
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|
|=||(484.503 - 90.81||-||661.78)||/||7647.105|
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 -2.46 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