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Forestar Group Inc (NYSE:FOR)
Beneish M-Score
-6.05 (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.

Forestar Group Inc has a M-score of -6.05 suggests that the company is not a manipulator.

FOR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.49   Max: 9.21
Current: -6.05

-6.49
9.21

During the past 13 years, the highest Beneish M-Score of Forestar Group Inc was 9.21. The lowest was -6.49. And the median was -2.41.


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 Forestar Group 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 * 0.3373+0.528 * -0.811+0.404 * 0.9943+0.892 * 1.0715+0.115 * 0.2245
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0243+4.679 * -0.455-0.327 * 0.5293
=-6.05

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $6.7 Mil.
Revenue was 47.992 + 41.888 + 114.018 + 43.168 = $247.1 Mil.
Gross Profit was -24.953 + 17.885 + 8.341 + -69.572 = $-68.3 Mil.
Total Current Assets was $544.3 Mil.
Total Assets was $681.8 Mil.
Property, Plant and Equipment(Net PPE) was $10.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.0 Mil.
Selling, General & Admin. Expense(SGA) was $25.5 Mil.
Total Current Liabilities was $35.4 Mil.
Long-Term Debt was $114.2 Mil.
Net Income was 9.614 + -4.376 + -6.166 + -164.216 = $-165.1 Mil.
Non Operating Income was 72.271 + 0.121 + 6.328 + 1.222 = $79.9 Mil.
Cash Flow from Operations was 7.53 + 5.009 + 50.166 + 2.473 = $65.2 Mil.
Accounts Receivable was $18.5 Mil.
Revenue was 43.625 + 47.805 + 80.316 + 58.84 = $230.6 Mil.
Gross Profit was 21.06 + 17.289 + -6.259 + 19.606 = $51.7 Mil.
Total Current Assets was $732.7 Mil.
Total Assets was $1,192.3 Mil.
Property, Plant and Equipment(Net PPE) was $235.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.1 Mil.
Selling, General & Admin. Expense(SGA) was $23.3 Mil.
Total Current Liabilities was $59.2 Mil.
Long-Term Debt was $434.8 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)
=(6.701 / 247.066) / (18.54 / 230.586)
=0.02712231 / 0.08040384
=0.3373

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)
=(51.696 / 230.586) / (-68.299 / 247.066)
=0.22419401 / -0.2764403
=-0.811

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 - (544.28 + 10.003) / 681.833) / (1 - (732.688 + 235.315) / 1192.319)
=0.18706927 / 0.18813422
=0.9943

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
=247.066 / 230.586
=1.0715

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))
=(47.148 / (47.148 + 235.315)) / (28.993 / (28.993 + 10.003))
=0.16691744 / 0.74348651
=0.2245

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)
=(25.541 / 247.066) / (23.272 / 230.586)
=0.10337724 / 0.10092547
=1.0243

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)
=((114.185 + 35.355) / 681.833) / ((434.84 + 59.191) / 1192.319)
=0.21932057 / 0.41434465
=0.5293

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
=(-165.144 - 79.942 - 65.178) / 681.833
=-0.455

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.

Forestar Group Inc has a M-score of -6.05 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.

Forestar Group Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 10.78381.59510.37292.25336.05421.13450.60860.88231.3009
GMI 1.05451.08280.88670.95291.24721.03590.98451.30741.4775-0.8845
AQI 0.18010.18625.4291.12061.06710.93030.9420.74341.06881.0252
SGI 1.45070.78910.89740.91570.69311.33751.2731.91810.92670.8554
DEPI 216.91130.00711.17660.84821.01531.220319.43240.71150.28890.3984
SGAI 1.10111.55851.331.47031.08870.77231.08840.45770.84541.4332
LVGI 0.3644.88611.07050.69621.0011.05871.33060.85811.11971.1286
TATA 0.10430.12040.0706-0.0964-0.0181-0.00490.0186-0.0685-0.1159-0.2757
M-score 23.13-4.07-0.02-3.56-1.542.48-0.06-2.18-3.01-4.79

Forestar Group Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.71250.94941.25390.88230.65970.58650.52571.37311.49560.3373
GMI 1.10221.02321.05271.47751.71671.8316-2.2429-2.8912-2.5775-0.811
AQI 0.87720.82890.78911.06881.0411.31381.18661.02520.94060.9943
SGI 1.3151.27881.07840.92670.84850.6760.66160.81040.8991.0715
DEPI 1.04871.12070.94630.28890.82110.68990.44610.39840.32020.2245
SGAI 0.48930.53930.73020.84541.28981.42991.79261.51271.12841.0243
LVGI 0.91260.97771.01191.11971.15681.08931.21711.12861.09670.5293
TATA -0.0432-0.0519-0.0691-0.1159-0.1121-0.1369-0.2919-0.2748-0.2989-0.455
M-score -2.54-2.48-2.52-3.01-3.18-3.36-6.49-5.84-5.56-6.05
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