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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 -3.31. 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 * 0.7588||+||0.528 * 1.1507||+||0.404 * 1.0051||+||0.892 * 1.2041||+||0.115 * 0.941|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8771||+||4.679 * -0.0075||-||0.327 * 0.9464|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $3,927 Mil.|
Revenue was 3823.831 + 3193.487 + 3207.537 + 2846.734 = $13,072 Mil.
Gross Profit was 1220.733 + 940.704 + 953.304 + 833.121 = $3,948 Mil.
Total Current Assets was $5,122 Mil.
Total Assets was $10,780 Mil.
Property, Plant and Equipment(Net PPE) was $561 Mil.
Depreciation, Depletion and Amortization(DDA) was $367 Mil.
Selling, General & Admin. Expense(SGA) was $2,781 Mil.
Total Current Liabilities was $4,525 Mil.
Long-Term Debt was $2,548 Mil.
Net Income was 263.975 + 104.163 + 121.668 + 82.167 = $572 Mil.
Non Operating Income was 76.684 + 26.028 + 38.811 + 60.516 = $202 Mil.
Cash Flow from Operations was 503.504 + 156.828 + 118.623 + -328.64 = $450 Mil.
|Accounts Receivable was $4,298 Mil.
Revenue was 3700.242 + 2712.559 + 2390.506 + 2052.503 = $10,856 Mil.
Gross Profit was 1169.721 + 938.899 + 902.532 + 761.726 = $3,773 Mil.
Total Current Assets was $5,305 Mil.
Total Assets was $11,018 Mil.
Property, Plant and Equipment(Net PPE) was $530 Mil.
Depreciation, Depletion and Amortization(DDA) was $314 Mil.
Selling, General & Admin. Expense(SGA) was $2,634 Mil.
Total Current Liabilities was $4,994 Mil.
Long-Term Debt was $2,645 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)|
|=||(3927.275 / 13071.589)||/||(4298.178 / 10855.81)|
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)|
|=||(3772.878 / 10855.81)||/||(3947.862 / 13071.589)|
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 - (5122.45 + 560.756) / 10779.587)||/||(1 - (5305.223 + 529.823) / 11017.943)|
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))|
|=||(314.096 / (314.096 + 529.823))||/||(366.927 / (366.927 + 560.756))|
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)|
|=||(2781.31 / 13071.589)||/||(2633.609 / 10855.81)|
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)|
|=||((2548.126 + 4525.429) / 10779.587)||/||((2645.111 + 4994.157) / 11017.943)|
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|
|=||(571.973 - 202.039||-||450.315)||/||10779.587|
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 -2.44 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