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Forestar Group Inc (NYSE:FOR)
Beneish M-Score
-4.62 (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 -4.62 suggests that the company is not a manipulator.

FOR' s Beneish M-Score Range Over the Past 10 Years
Min: -16.43   Max: 9.21
Current: -4.62

-16.43
9.21

During the past 13 years, the highest Beneish M-Score of Forestar Group Inc was 9.21. The lowest was -16.43. And the median was -2.30.


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 * 1.4151+0.528 * -0.7748+0.404 * 0.9406+0.892 * 0.9501+0.115 * 0.3202
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0677+4.679 * -0.2986-0.327 * 1.0967
=-4.62

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $24.0 Mil.
Revenue was 41.888 + 114.018 + 43.168 + 57.43 = $256.5 Mil.
Gross Profit was 17.885 + 8.341 + -69.572 + -35.009 = $-78.4 Mil.
Total Current Assets was $755.8 Mil.
Total Assets was $948.1 Mil.
Property, Plant and Equipment(Net PPE) was $52.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $38.5 Mil.
Selling, General & Admin. Expense(SGA) was $25.6 Mil.
Total Current Liabilities was $50.1 Mil.
Long-Term Debt was $372.8 Mil.
Net Income was -4.376 + -6.166 + -164.216 + -34.507 = $-209.3 Mil.
Non Operating Income was 0.121 + 6.328 + 1.222 + 7.205 = $14.9 Mil.
Cash Flow from Operations was 5.009 + 50.166 + 2.473 + 1.253 = $58.9 Mil.
Accounts Receivable was $17.9 Mil.
Revenue was 47.805 + 80.316 + 58.84 + 83.013 = $270.0 Mil.
Gross Profit was 17.289 + -6.259 + 19.606 + 33.261 = $63.9 Mil.
Total Current Assets was $752.2 Mil.
Total Assets was $1,237.0 Mil.
Property, Plant and Equipment(Net PPE) was $291.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.6 Mil.
Selling, General & Admin. Expense(SGA) was $25.2 Mil.
Total Current Liabilities was $68.7 Mil.
Long-Term Debt was $434.4 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)
=(24.036 / 256.504) / (17.877 / 269.974)
=0.09370614 / 0.06621749
=1.4151

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)
=(8.341 / 269.974) / (17.885 / 256.504)
=0.23667835 / -0.30547282
=-0.7748

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 - (755.847 + 52.575) / 948.052) / (1 - (752.232 + 291.058) / 1236.971)
=0.14728095 / 0.15657683
=0.9406

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
=256.504 / 269.974
=0.9501

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))
=(45.601 / (45.601 + 291.058)) / (38.545 / (38.545 + 52.575))
=0.1354516 / 0.42301361
=0.3202

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)
=(25.59 / 256.504) / (25.227 / 269.974)
=0.09976453 / 0.09344233
=1.0677

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)
=((372.759 + 50.077) / 948.052) / ((434.413 + 68.65) / 1236.971)
=0.44600507 / 0.40668941
=1.0967

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
=(-209.265 - 14.876 - 58.901) / 948.052
=-0.2986

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 -4.62 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 1.05450.88771.06320.96941.26481.02150.98451.30741.4775-0.8845
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 216.91130.00711.17660.84821.07761.204718.54520.71150.28890.3984
SGAI 1.17361.46221.331.47031.08870.77231.08840.45770.84541.4332
LVGI 0.3644.88611.07050.69621.0011.05871.33060.85811.11971.1141
TATA 0.10430.12340.0733-0.0964-0.01810.00130.0227-0.0641-0.0857-0.2734
M-score 23.12-4.140.08-3.55-1.532.50-0.14-2.16-2.87-4.76

Forestar Group Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.60860.71250.94941.25390.88230.65970.55340.4941.30091.4151
GMI 1.30741.10221.02321.05271.47751.7167-22.9492-0.9564-0.8845-0.7748
AQI 0.74340.87720.82890.78911.06881.0411.31381.18661.07210.9406
SGI 1.91811.3151.27881.07840.92670.84850.71650.70410.85540.9501
DEPI 0.71151.04871.12070.94630.28890.82110.68990.44610.39840.3202
SGAI 0.45770.48930.53930.73020.84541.28981.34911.68441.43321.0677
LVGI 0.85810.91260.97771.01191.11971.15681.08931.21711.11411.0967
TATA -0.0685-0.0432-0.0519-0.0691-0.1159-0.1121-0.1366-0.2916-0.2722-0.2986
M-score -2.18-2.54-2.48-2.52-3.01-3.18-16.43-5.78-4.75-4.62
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