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Forestar Group Inc (NYSE:FOR)
Beneish M-Score
-4.76 (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 -4.76 suggests that the company is not a manipulator.

FOR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.76   Max: 2.49
Current: -4.76

-4.76
2.49

During the past 13 years, the highest Beneish M-Score of Forestar Group Inc was 2.49. The lowest was -4.76. And the median was -2.18.


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 * 1.3009+0.528 * -0.8845+0.404 * 1.0721+0.892 * 0.8554+0.115 * 0.3984
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4332+4.679 * -0.2734-0.327 * 1.1141
=-4.76

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $35.7 Mil.
Revenue was 114.018 + 43.168 + 57.43 + 47.805 = $262.4 Mil.
Gross Profit was 8.341 + -69.572 + -35.009 + 17.289 = $-79.0 Mil.
Total Current Assets was $729.8 Mil.
Total Assets was $980.5 Mil.
Property, Plant and Equipment(Net PPE) was $91.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.1 Mil.
Selling, General & Admin. Expense(SGA) was $27.3 Mil.
Total Current Liabilities was $50.1 Mil.
Long-Term Debt was $389.8 Mil.
Net Income was -6.166 + -164.216 + -34.507 + -8.158 = $-213.0 Mil.
Non Operating Income was 6.328 + 1.222 + 7.205 + 5.138 = $19.9 Mil.
Cash Flow from Operations was 50.166 + 2.473 + 1.253 + -18.766 = $35.1 Mil.
Accounts Receivable was $32.1 Mil.
Revenue was 80.316 + 58.84 + 83.013 + 84.605 = $306.8 Mil.
Gross Profit was -6.259 + 19.606 + 33.261 + 35.025 = $81.6 Mil.
Total Current Assets was $792.3 Mil.
Total Assets was $1,258.2 Mil.
Property, Plant and Equipment(Net PPE) was $275.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $41.7 Mil.
Selling, General & Admin. Expense(SGA) was $22.2 Mil.
Total Current Liabilities was $73.9 Mil.
Long-Term Debt was $432.7 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)
=(35.712 / 262.421) / (32.092 / 306.774)
=0.13608667 / 0.10461121
=1.3009

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)
=(-69.572 / 306.774) / (8.341 / 262.421)
=0.26610143 / -0.30085626
=-0.8845

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 - (729.765 + 91.345) / 980.513) / (1 - (792.29 + 275.12) / 1258.199)
=0.16257102 / 0.15163659
=1.0721

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
=262.421 / 306.774
=0.8554

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))
=(41.715 / (41.715 + 275.12)) / (45.085 / (45.085 + 91.345))
=0.13166159 / 0.33046251
=0.3984

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)
=(27.253 / 262.421) / (22.23 / 306.774)
=0.10385221 / 0.07246377
=1.4332

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)
=((389.782 + 50.079) / 980.513) / ((432.744 + 73.869) / 1258.199)
=0.44860293 / 0.40264934
=1.1141

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
=(-213.047 - 19.893 - 35.126) / 980.513
=-0.2734

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 -4.76 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 0.18010.18625.4291.12061.06710.93030.9420.74341.06881.0721
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 0.3644.88611.07050.69621.0011.05871.33060.85811.11971.1141
TATA 0.10430.12040.0706-0.0964-0.0181-0.00490.0186-0.0685-0.1159-0.2734
M-score 23.13-4.07-0.02-3.56-1.542.48-0.06-2.18-3.01-4.76

Forestar Group Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.57410.60860.71250.94941.25390.88230.65970.55340.4941.3009
GMI 1.20311.30741.10221.02321.05271.47751.7167-22.9492-0.9564-0.8845
AQI 0.90.74340.87720.82890.78911.06881.0411.31381.18661.0721
SGI 1.90631.91811.3151.27881.07840.92670.84850.71650.70410.8554
DEPI 0.810.71151.04871.12070.94630.28890.82110.68990.44610.3984
SGAI 0.47350.45770.48930.53930.73020.84541.28981.34911.68441.4332
LVGI 1.05030.85810.91260.97771.01191.11971.15681.08931.21711.1141
TATA -0.0396-0.0685-0.0432-0.0519-0.0691-0.1159-0.1131-0.1376-0.2927-0.2734
M-score -2.13-2.18-2.54-2.48-2.52-3.01-3.18-16.43-5.79-4.76
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