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Colony Capital Inc (NYSE:CLNY)
Beneish M-Score
-1.67 (As of Today)

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.

Colony Capital Inc has a M-score of -1.67 signals that the company is a manipulator.

CLNY' s Beneish M-Score Range Over the Past 10 Years
Min: -2.71   Max: -1.67
Current: -1.67

-2.71
-1.67

During the past 6 years, the highest Beneish M-Score of Colony Capital Inc was -1.67. The lowest was -2.71. And the median was -2.53.


Definition

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 * 0.5565+0.892 * 2.5088+0.115 * 0.9401
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.508+4.679 * -0.0258-0.327 * 1.4318
=-1.67

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $4,048.6 Mil.
Revenue was 262.978 + 220.904 + 116.612 + 85.597 = $686.1 Mil.
Gross Profit was 262.978 + 220.904 + 116.612 + 85.597 = $686.1 Mil.
Total Current Assets was $4,356.6 Mil.
Total Assets was $9,704.6 Mil.
Property, Plant and Equipment(Net PPE) was $3,042.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $106.7 Mil.
Selling, General & Admin. Expense(SGA) was $249.7 Mil.
Total Current Liabilities was $830.9 Mil.
Long-Term Debt was $3,497.1 Mil.
Net Income was 49.297 + 59.316 + 10.529 + 24.816 = $144.0 Mil.
Non Operating Income was -0.759 + 40.271 + -0.286 + -0.022 = $39.2 Mil.
Cash Flow from Operations was 194.161 + 70.075 + 57.921 + 33.158 = $355.3 Mil.
Accounts Receivable was $0.0 Mil.
Revenue was 77.282 + 78.563 + 59.207 + 58.42 = $273.5 Mil.
Gross Profit was 77.282 + 78.563 + 59.207 + 58.42 = $273.5 Mil.
Total Current Assets was $2,131.6 Mil.
Total Assets was $3,953.7 Mil.
Property, Plant and Equipment(Net PPE) was $133.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.4 Mil.
Selling, General & Admin. Expense(SGA) was $66.0 Mil.
Total Current Liabilities was $139.6 Mil.
Long-Term Debt was $1,091.8 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(4048.649 / 686.091) / (0 / 273.472)
=5.90103791 / 0
=1

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(220.904 / 273.472) / (262.978 / 686.091)
=1 / 1
=1

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (4356.612 + 3042.047) / 9704.61) / (1 - (2131.584 + 133.945) / 3953.65)
=0.23761398 / 0.42697786
=0.5565

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=686.091 / 273.472
=2.5088

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))
=(4.407 / (4.407 + 133.945)) / (106.689 / (106.689 + 3042.047))
=0.03185353 / 0.03388312
=0.9401

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)
=(249.695 / 686.091) / (66 / 273.472)
=0.3639386 / 0.24134098
=1.508

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)
=((3497.062 + 830.896) / 9704.61) / ((1091.83 + 139.597) / 3953.65)
=0.44596929 / 0.31146586
=1.4318

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(143.958 - 39.204 - 355.315) / 9704.61
=-0.0258

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 -1.67 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Colony Capital Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.2666
GMI 1
AQI 0.6059
SGI 1.6357
DEPI 0.4952
SGAI 1.3624
LVGI 1.9491
TATA -0.0018
M-score -2.27

Colony Capital Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.242111
GMI 1111
AQI 0.60590.74920.62760.5565
SGI 1.66811.73932.05372.5088
DEPI 0.49520.84251.02980.9401
SGAI 1.3361.35011.59881.508
LVGI 1.94911.95531.20691.4318
TATA -0.0018-0.0074-0.0099-0.0258
M-score -2.26-2.35-1.90-1.67
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