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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 Forest City Realty Trust Inc was -2.16. The lowest was -3.34. And the median was -2.75.
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 Forest City Realty Trust 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 * 0.9907||+||0.528 * 0.9152||+||0.404 * 0.484||+||0.892 * 0.9502||+||0.115 * 0.9312|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2763||+||4.679 * -0.1046||-||0.327 * 1.0234|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $208.6 Mil.|
Revenue was 239.727 + 237.53 + 225.963 + 226.263 = $929.5 Mil.
Gross Profit was 125.891 + 121.46 + 116.979 + 103.708 = $468.0 Mil.
Total Current Assets was $915.6 Mil.
Total Assets was $8,228.6 Mil.
Property, Plant and Equipment(Net PPE) was $6,473.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $250.8 Mil.
Selling, General & Admin. Expense(SGA) was $60.4 Mil.
Total Current Liabilities was $877.3 Mil.
Long-Term Debt was $3,566.3 Mil.
Net Income was 1.825 + -430.861 + 26.599 + 244.035 = $-158.4 Mil.
Non Operating Income was 495.833 + -301.281 + 19.748 + 195.009 = $409.3 Mil.
Cash Flow from Operations was 102.817 + 96.861 + 102.223 + -9.05 = $292.9 Mil.
|Accounts Receivable was $221.6 Mil.
Revenue was 272.83 + 264.42 + 232.719 + 208.262 = $978.2 Mil.
Gross Profit was 128.977 + 128.846 + 105.713 + 87.292 = $450.8 Mil.
Total Current Assets was $803.7 Mil.
Total Assets was $9,923.2 Mil.
Property, Plant and Equipment(Net PPE) was $7,028.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $252.9 Mil.
Selling, General & Admin. Expense(SGA) was $49.8 Mil.
Total Current Liabilities was $1,013.1 Mil.
Long-Term Debt was $4,222.9 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)|
|=||(208.563 / 929.483)||/||(221.562 / 978.231)|
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)|
|=||(450.828 / 978.231)||/||(468.038 / 929.483)|
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 - (915.645 + 6473.559) / 8228.597)||/||(1 - (803.715 + 7028.087) / 9923.15)|
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))|
|=||(252.925 / (252.925 + 7028.087))||/||(250.848 / (250.848 + 6473.559))|
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)|
|=||(60.423 / 929.483)||/||(49.824 / 978.231)|
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)|
|=||((3566.282 + 877.316) / 8228.597)||/||((4222.937 + 1013.072) / 9923.15)|
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|
|=||(-158.402 - 409.309||-||292.851)||/||8228.597|
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.
Forest City Realty Trust Inc has a M-score of -3.34 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
Forest City Realty Trust Inc Annual Data
Forest City Realty Trust Inc Quarterly Data