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Fortress Investment Group LLC (NYSE:FIG)
Beneish M-Score
-1.25 (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.

Fortress Investment Group LLC has a M-score of -1.25 signals that the company is a manipulator.

FIG' s 10-Year Beneish M-Score Range
Min: -7.52   Max: -1.25
Current: -1.25

-7.52
-1.25

During the past 13 years, the highest Beneish M-Score of Fortress Investment Group LLC was -1.25. The lowest was -7.52. And the median was -3.53.


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 Fortress Investment Group LLC 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 * 0.9733+0.528 * 1+0.404 * 0.9259+0.892 * 1.4392+0.115 * 8.9095
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7045+4.679 * -0.0205-0.327 * 0.9285
=-1.25

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $198 Mil.
Revenue was 427.313 + 310.166 + 565.535 + 232.019 = $1,535 Mil.
Gross Profit was 427.313 + 310.166 + 565.535 + 232.019 = $1,535 Mil.
Total Current Assets was $484 Mil.
Total Assets was $2,955 Mil.
Property, Plant and Equipment(Net PPE) was $258 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $932 Mil.
Total Current Liabilities was $558 Mil.
Long-Term Debt was $267 Mil.
Net Income was 31.22 + 2.936 + 145.813 + 42.381 = $222 Mil.
Non Operating Income was 27.38 + 9.13 + 18.658 + 68.011 = $123 Mil.
Cash Flow from Operations was 17.47 + -98.529 + 100.383 + 140.439 = $160 Mil.
Accounts Receivable was $142 Mil.
Revenue was 223.074 + 244.355 + 417.64 + 181.523 = $1,067 Mil.
Gross Profit was 223.074 + 244.355 + 417.64 + 181.523 = $1,067 Mil.
Total Current Assets was $434 Mil.
Total Assets was $2,268 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $17 Mil.
Selling, General & Admin. Expense(SGA) was $919 Mil.
Total Current Liabilities was $593 Mil.
Long-Term Debt was $89 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)
=(198.267 / 1535.033) / (141.537 / 1066.592)
=0.12916139 / 0.13270023
=0.9733

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)
=(310.166 / 1066.592) / (427.313 / 1535.033)
=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 - (484.104 + 258.498) / 2955.397) / (1 - (434.129 + 0) / 2268.377)
=0.7487302 / 0.80861691
=0.9259

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
=1535.033 / 1066.592
=1.4392

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))
=(16.524 / (16.524 + 0)) / (32.682 / (32.682 + 258.498))
=1 / 0.11223985
=8.9095

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)
=(931.91 / 1535.033) / (919.09 / 1066.592)
=0.60709444 / 0.86170719
=0.7045

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)
=((267.398 + 558.073) / 2955.397) / ((89.453 + 592.921) / 2268.377)
=0.27930968 / 0.30082037
=0.9285

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
=(222.35 - 123.179 - 159.763) / 2955.397
=-0.0205

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.

Fortress Investment Group LLC has a M-score of -1.25 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.

Fortress Investment Group LLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.32810.32732.71962.22871.09080.83161.1126
GMI 0111111
AQI 0.55681.45241.00040.90930.94671.15540.8685
SGI 0.81250.59210.79821.62690.90361.12961.3043
DEPI 112.84920.98530.7881.37151.0943
SGAI 17.23491.55131.31090.70861.17950.40820.7676
LVGI 5.21310.43711.66230.80981.16140.63850.9255
TATA 0.989-0.7662-0.2754-0.3543-0.289-0.1207-0.155
M-score -3.52-6.78-2.42-2.37-3.96-2.76-2.81

Fortress Investment Group LLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.58771.80591.65160.83160.45030.41450.42421.11260.78060.9733
GMI 1111111111
AQI 0.95050.97281.00911.15541.08731.03551.05560.86850.95210.9259
SGI 0.84460.85520.81331.12961.25091.26571.34821.30431.27651.4392
DEPI 1111.37151111.094313.81048.9095
SGAI 0.83230.70230.54040.40820.43250.51990.57820.76760.81490.7045
LVGI 0.99050.940.90550.63850.77480.93360.81850.92551.150.9285
TATA -0.2451-0.1854-0.1724-0.1207-0.191-0.2209-0.2116-0.155-0.0624-0.0205
M-score -3.21-2.68-2.74-2.76-3.45-3.70-3.53-2.81-1.29-1.25
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