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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.
Inland Real Estate Corp has a M-score of -3.13 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Inland Real Estate Corp was -2.29. The lowest was -4.37. And the median was -2.82.
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 Inland Real Estate Corp 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 * 0.9207||+||0.528 * 0.7481||+||0.404 * 1.0576||+||0.892 * 1.2603||+||0.115 * 0.6749|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9628||+||4.679 * -0.0498||-||0.327 * 2.3447|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $41.9 Mil.|
Revenue was 48.807 + 57.106 + 48.724 + 51.836 = $206.5 Mil.
Gross Profit was 42.227 + 44.732 + 41.66 + 45.715 = $174.3 Mil.
Total Current Assets was $69.1 Mil.
Total Assets was $1,571.0 Mil.
Property, Plant and Equipment(Net PPE) was $1,204.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $79.3 Mil.
Selling, General & Admin. Expense(SGA) was $22.5 Mil.
Total Current Liabilities was $103.7 Mil.
Long-Term Debt was $890.7 Mil.
Net Income was 12.646 + 15.424 + -4.884 + 5.696 = $28.9 Mil.
Non Operating Income was 10.65 + 13.06 + 1.906 + 1.009 = $26.6 Mil.
Cash Flow from Operations was 20.96 + 16.08 + 22.891 + 20.537 = $80.5 Mil.
|Accounts Receivable was $36.1 Mil.
Revenue was 42.931 + 40.931 + 39.081 + 40.89 = $163.8 Mil.
Gross Profit was 37.142 + 26.064 + 4.983 + 35.295 = $103.5 Mil.
Total Current Assets was $54.2 Mil.
Total Assets was $1,583.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,246.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $54.2 Mil.
Selling, General & Admin. Expense(SGA) was $18.6 Mil.
Total Current Liabilities was $108.9 Mil.
Long-Term Debt was $318.6 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)|
|=||(41.934 / 206.473)||/||(36.139 / 163.833)|
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)|
|=||(44.732 / 163.833)||/||(42.227 / 206.473)|
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 - (69.122 + 1204.906) / 1570.95)||/||(1 - (54.151 + 1246.348) / 1583.5)|
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))|
|=||(54.211 / (54.211 + 1246.348))||/||(79.313 / (79.313 + 1204.906))|
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)|
|=||(22.548 / 206.473)||/||(18.582 / 163.833)|
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)|
|=||((890.657 + 103.689) / 1570.95)||/||((318.558 + 108.907) / 1583.5)|
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|
|=||(28.882 - 26.625||-||80.468)||/||1570.95|
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.
Inland Real Estate Corp has a M-score of -3.13 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
Inland Real Estate Corp Annual Data
Inland Real Estate Corp Quarterly Data