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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.
During the past 13 years, the highest Beneish M-Score of Federal Realty Investment Trust was -1.67. The lowest was -3.23. And the median was -2.60.
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 Federal Realty Investment Trust 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 * 0.911||+||0.528 * 0.8829||+||0.404 * 1.1896||+||0.892 * 1.0807||+||0.115 * 1.0432|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9913||+||4.679 * -0.0334||-||0.327 * 0.9979|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $153.5 Mil.|
Revenue was 185.252 + 181.461 + 184.792 + 176.377 = $727.9 Mil.
Gross Profit was 129.009 + 128.171 + 122.959 + 123.135 = $503.3 Mil.
Total Current Assets was $166.4 Mil.
Total Assets was $4,783.8 Mil.
Property, Plant and Equipment(Net PPE) was $4,370.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $171.8 Mil.
Selling, General & Admin. Expense(SGA) was $35.6 Mil.
Total Current Liabilities was $236.9 Mil.
Long-Term Debt was $2,532.8 Mil.
Net Income was 52.447 + 43.632 + 46.186 + 35.162 = $177.4 Mil.
Non Operating Income was 0.36 + -18.666 + 0.22 + -10.211 = $-28.3 Mil.
Cash Flow from Operations was 87.502 + 91.662 + 81.986 + 104.284 = $365.4 Mil.
|Accounts Receivable was $155.9 Mil.
Revenue was 170.938 + 167.947 + 170.828 + 163.846 = $673.6 Mil.
Gross Profit was 118.656 + 117.378 + 114.998 + 60.147 = $411.2 Mil.
Total Current Assets was $179.9 Mil.
Total Assets was $4,479.4 Mil.
Property, Plant and Equipment(Net PPE) was $4,105.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $168.6 Mil.
Selling, General & Admin. Expense(SGA) was $33.3 Mil.
Total Current Liabilities was $234.1 Mil.
Long-Term Debt was $2,364.9 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(153.517 / 727.882)||/||(155.937 / 673.559)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(128.171 / 673.559)||/||(129.009 / 727.882)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (166.381 + 4370.67) / 4783.803)||/||(1 - (179.854 + 4105.326) / 4479.398)|
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.
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))|
|=||(168.617 / (168.617 + 4105.326))||/||(171.784 / (171.784 + 4370.67))|
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)|
|=||(35.64 / 727.882)||/||(33.27 / 673.559)|
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)|
|=||((2532.825 + 236.931) / 4783.803)||/||((2364.936 + 234.139) / 4479.398)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(177.427 - -28.297||-||365.434)||/||4783.803|
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.
Federal Realty Investment Trust has a M-score of -2.62 suggests that the company will not be a manipulator.
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
Federal Realty Investment Trust Annual Data
Federal Realty Investment Trust Quarterly Data