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Beneish M-Score -1.18 higher than -2.22, which implies that it might have manipulated its financial results.
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 7 years, the highest Beneish M-Score of Colony Capital Inc was -1.18. The lowest was -2.71. And the median was -2.14.
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 Colony Capital 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||+||0.528 * 1||+||0.404 * 0.6929||+||0.892 * 2.5934||+||0.115 * 0.3565|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1485||+||4.679 * 0.0128||-||0.327 * 0.8747|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $4,067.5 Mil.|
Revenue was 203.218 + 241.482 + 262.978 + 220.904 = $928.6 Mil.
Gross Profit was 203.218 + 241.482 + 262.978 + 220.904 = $928.6 Mil.
Total Current Assets was $4,238.8 Mil.
Total Assets was $9,929.2 Mil.
Property, Plant and Equipment(Net PPE) was $3,304.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $164.8 Mil.
Selling, General & Admin. Expense(SGA) was $349.4 Mil.
Total Current Liabilities was $428.5 Mil.
Long-Term Debt was $4,187.2 Mil.
Net Income was 30.015 + 30.838 + 49.297 + 59.316 = $169.5 Mil.
Non Operating Income was -24.197 + -122.027 + -143.028 + -60.999 = $-350.3 Mil.
Cash Flow from Operations was 77.677 + 50.969 + 194.161 + 70.075 = $392.9 Mil.
|Accounts Receivable was $0.0 Mil.
Revenue was 116.612 + 85.597 + 77.282 + 78.563 = $358.1 Mil.
Gross Profit was 116.612 + 85.597 + 77.282 + 78.563 = $358.1 Mil.
Total Current Assets was $2,211.2 Mil.
Total Assets was $6,163.9 Mil.
Property, Plant and Equipment(Net PPE) was $1,814.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $31.3 Mil.
Selling, General & Admin. Expense(SGA) was $117.3 Mil.
Total Current Liabilities was $617.8 Mil.
Long-Term Debt was $2,657.9 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)|
|=||(4067.544 / 928.582)||/||(0 / 358.054)|
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)|
|=||(358.054 / 358.054)||/||(928.582 / 928.582)|
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 - (4238.844 + 3304.113) / 9929.156)||/||(1 - (2211.193 + 1814.783) / 6163.893)|
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))|
|=||(31.256 / (31.256 + 1814.783))||/||(164.755 / (164.755 + 3304.113))|
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)|
|=||(349.425 / 928.582)||/||(117.316 / 358.054)|
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)|
|=||((4187.231 + 428.515) / 9929.156)||/||((2657.949 + 617.775) / 6163.893)|
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|
|=||(169.466 - -350.251||-||392.882)||/||9929.156|
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.
Colony Capital Inc has a M-score of -1.18 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
Colony Capital Inc Annual Data
Colony Capital Inc Quarterly Data