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Forest City Realty Trust Inc (NYSE:FCE.B)
Beneish M-Score
0.00 (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.

Forest City Realty Trust Inc has a M-score of -3.04 suggests that the company is not a manipulator.

During the past 13 years, the highest Beneish M-Score of Forest City Realty Trust Inc was 0.00. The lowest was 0.00. And the median was 0.00.


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 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 * 0.9475+0.528 * 0.8009+0.404 * 0.9479+0.892 * 1.0591+0.115 * 1.1558
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3777+4.679 * -0.0924-0.327 * 0.8804
=-3.04

* 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 $444 Mil.
Revenue was 289.057 + 259.759 + 237.082 + 252.135 = $1,038 Mil.
Gross Profit was 135.554 + 114.891 + 96.154 + 100.639 = $447 Mil.
Total Current Assets was $1,017 Mil.
Total Assets was $9,960 Mil.
Property, Plant and Equipment(Net PPE) was $7,792 Mil.
Depreciation, Depletion and Amortization(DDA) was $267 Mil.
Selling, General & Admin. Expense(SGA) was $52 Mil.
Total Current Liabilities was $1,600 Mil.
Long-Term Debt was $4,773 Mil.
Net Income was -302.219 + 303.756 + -54.209 + 69.191 = $17 Mil.
Non Operating Income was -23.656 + 482.632 + -37.255 + 255.284 = $677 Mil.
Cash Flow from Operations was 70.157 + 75.401 + 12.992 + 100.793 = $259 Mil.
Accounts Receivable was $443 Mil.
Revenue was 234.743 + 229.637 + 249.537 + 266.227 = $980 Mil.
Gross Profit was 98.352 + 93.889 + 89.995 + 55.972 = $338 Mil.
Total Current Assets was $866 Mil.
Total Assets was $8,209 Mil.
Property, Plant and Equipment(Net PPE) was $6,342 Mil.
Depreciation, Depletion and Amortization(DDA) was $253 Mil.
Selling, General & Admin. Expense(SGA) was $35 Mil.
Total Current Liabilities was $1,250 Mil.
Long-Term Debt was $4,716 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)
=(444.136 / 1038.033) / (442.624 / 980.144)
=0.42786308 / 0.45159079
=0.9475

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)
=(338.208 / 980.144) / (447.238 / 1038.033)
=0.3450595 / 0.43085143
=0.8009

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 - (1017.147 + 7791.501) / 9960.241) / (1 - (865.671 + 6342.024) / 8208.93)
=0.11561899 / 0.121969
=0.9479

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
=1038.033 / 980.144
=1.0591

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))
=(252.924 / (252.924 + 6342.024)) / (267.41 / (267.41 + 7791.501))
=0.03835117 / 0.0331819
=1.1558

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)
=(51.628 / 1038.033) / (35.383 / 980.144)
=0.04973638 / 0.0360998
=1.3777

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)
=((4773.418 + 1600.335) / 9960.241) / ((4716.396 + 1250.018) / 8208.93)
=0.63991956 / 0.72681994
=0.8804

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
=(16.519 - 677.005 - 259.343) / 9960.241
=-0.0924

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 -3.04 suggests that the company will not 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.

Forest City Realty Trust Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Dec14
DSRI 1.0667
GMI 1.0575
AQI 1.1545
SGI 0.9217
DEPI 0.7517
SGAI 1.0573
LVGI 0.8739
TATA -0.0568
M-score -2.66

Forest City Realty Trust Inc Quarterly Data

Apr13Jul13Oct13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.92680.9475
GMI 0.7870.8009
AQI 0.9430.9479
SGI 0.94851.0591
DEPI 1.51241.1558
SGAI 2.69191.3777
LVGI 0.86490.8804
TATA -0.0614-0.0924
M-score -3.20-3.04
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