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GuruFocus has detected 5 Warning Signs with Federal Realty Investment Trust $FRT.
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Federal Realty Investment Trust (NYSE:FRT)
Beneish M-Score
-2.67 (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.

Federal Realty Investment Trust has a M-score of -2.67 suggests that the company is not a manipulator.

FRT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99   Max: -1.67
Current: -2.67

-2.99
-1.67

During the past 13 years, the highest Beneish M-Score of Federal Realty Investment Trust was -1.67. The lowest was -2.99. And the median was -2.56.


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 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 * 0.8954+0.528 * 1.0039+0.404 * 0.8653+0.892 * 1.0774+0.115 * 1.011
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8697+4.679 * -0.0305-0.327 * 0.9764
=-2.67

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $146.7 Mil.
Revenue was 204.109 + 201.157 + 197.981 + 198.344 = $801.6 Mil.
Gross Profit was 68.882 + 162.569 + 161.003 + 155.525 = $548.0 Mil.
Total Current Assets was $170.0 Mil.
Total Assets was $5,423.3 Mil.
Property, Plant and Equipment(Net PPE) was $5,029.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $193.6 Mil.
Selling, General & Admin. Expense(SGA) was $33.4 Mil.
Total Current Liabilities was $289.5 Mil.
Long-Term Debt was $2,798.5 Mil.
Net Income was 58.037 + 58.977 + 55.941 + 76.955 = $249.9 Mil.
Non Operating Income was -0.773 + -0.929 + -1.558 + -0.683 = $-3.9 Mil.
Cash Flow from Operations was 130.282 + 89.736 + 98.728 + 100.508 = $419.3 Mil.
Accounts Receivable was $152.0 Mil.
Revenue was 192.507 + 185.252 + 181.461 + 184.792 = $744.0 Mil.
Gross Profit was 67.591 + 150.813 + 148.838 + 143.353 = $510.6 Mil.
Total Current Assets was $173.1 Mil.
Total Assets was $4,896.6 Mil.
Property, Plant and Equipment(Net PPE) was $4,490.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $174.8 Mil.
Selling, General & Admin. Expense(SGA) was $35.6 Mil.
Total Current Liabilities was $228.3 Mil.
Long-Term Debt was $2,627.2 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)
=(146.653 / 801.591) / (152.02 / 744.012)
=0.1829524 / 0.20432466
=0.8954

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)
=(510.595 / 744.012) / (547.979 / 801.591)
=0.68627253 / 0.68361421
=1.0039

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 - (170.021 + 5029.839) / 5423.279) / (1 - (173.066 + 4490.365) / 4896.559)
=0.04119629 / 0.04761058
=0.8653

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
=801.591 / 744.012
=1.0774

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))
=(174.796 / (174.796 + 4490.365)) / (193.585 / (193.585 + 5029.839))
=0.03746837 / 0.03706094
=1.011

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)
=(33.399 / 801.591) / (35.645 / 744.012)
=0.04166589 / 0.04790917
=0.8697

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)
=((2798.452 + 289.481) / 5423.279) / ((2627.216 + 228.309) / 4896.559)
=0.56938487 / 0.58316973
=0.9764

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
=(249.91 - -3.943 - 419.254) / 5423.279
=-0.0305

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 -2.67 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 local exchange's currency.

Federal Realty Investment Trust Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.20121.11991.60380.92461.13930.89331.02730.95750.97160.8954
GMI 01.02170.99520.86140.99311.13791.00461.01461.00711.0039
AQI 0.31091.00831.71911.18810.85390.9911.00081.03131.01780.8653
SGI 1.07121.07671.01991.02131.01721.09921.05221.07641.08441.0774
DEPI 1.01041.00050.96430.97511.0880.96180.94431.02711.05711.011
SGAI 1.16280.9340.80811.0751.1780.97790.97520.93911.01710.8697
LVGI 1.4111.01970.55661.79641.0180.98950.98320.95961.00820.9764
TATA -0.0067-0.0324-0.0488-0.0404-0.0267-0.0362-0.032-0.0368-0.0261-0.0305
M-score -3.23-2.43-1.67-2.99-2.55-2.59-2.55-2.58-2.54-2.67

Federal Realty Investment Trust Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.02260.95750.95420.95290.9110.97160.94520.91690.90050.8954
GMI 1.11550.97470.92930.85330.78491.00711.04021.08291.12391.0039
AQI 1.01071.03131.47561.15611.18961.01780.68750.86230.82690.8653
SGI 1.07021.07641.07521.07851.08071.08441.08221.08481.08531.0774
DEPI 1.01771.02711.01321.0331.04321.05711.06011.0151.00831.011
SGAI 0.99740.93910.95420.99020.99131.01710.9610.91910.86340.8697
LVGI 1.33330.95961.0080.99380.99791.00820.94810.96780.98590.9764
TATA -0.0353-0.0368-0.034-0.0301-0.0324-0.0261-0.0226-0.0248-0.023-0.0305
M-score -2.60-2.60-2.45-2.60-2.67-2.54-2.64-2.58-2.58-2.67
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