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Inland Real Estate Corp (NYSE:IRC)
Beneish M-Score
-2.89 (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.

Inland Real Estate Corp has a M-score of -2.89 suggests that the company is not a manipulator.

IRC' s Beneish M-Score Range Over the Past 10 Years
Min: -10.3   Max: 2.25
Current: -2.89

-10.3
2.25

During the past 13 years, the highest Beneish M-Score of Inland Real Estate Corp was 2.25. The lowest was -10.30. And the median was -2.58.


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 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 * 0.9512+0.528 * 0.9837+0.404 * 0.9121+0.892 * 0.9958+0.115 * 1.0537
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2362+4.679 * -0.0584-0.327 * 1.0235
=-2.89

* 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 $36.2 Mil.
Revenue was 50.553 + 48.244 + 49.336 + 55.767 = $203.9 Mil.
Gross Profit was 43.089 + 41.73 + 42.884 + 46.847 = $174.6 Mil.
Total Current Assets was $45.7 Mil.
Total Assets was $1,521.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,180.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $68.3 Mil.
Selling, General & Admin. Expense(SGA) was $28.6 Mil.
Total Current Liabilities was $69.2 Mil.
Long-Term Debt was $849.1 Mil.
Net Income was 1.656 + 12.274 + 8.661 + 2.94 = $25.5 Mil.
Non Operating Income was 3.747 + 9.326 + 1.771 + 2.136 = $17.0 Mil.
Cash Flow from Operations was 23.273 + 24.07 + 29.27 + 20.739 = $97.4 Mil.
Accounts Receivable was $38.2 Mil.
Revenue was 50.638 + 48.21 + 48.807 + 57.106 = $204.8 Mil.
Gross Profit was 43.387 + 42.083 + 42.227 + 44.732 = $172.4 Mil.
Total Current Assets was $56.6 Mil.
Total Assets was $1,573.0 Mil.
Property, Plant and Equipment(Net PPE) was $1,181.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $72.3 Mil.
Selling, General & Admin. Expense(SGA) was $23.2 Mil.
Total Current Liabilities was $61.6 Mil.
Long-Term Debt was $865.9 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)
=(36.195 / 203.9) / (38.211 / 204.761)
=0.17751349 / 0.18661269
=0.9512

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)
=(41.73 / 204.761) / (43.089 / 203.9)
=0.84209884 / 0.85605689
=0.9837

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 - (45.718 + 1180.303) / 1521.5) / (1 - (56.596 + 1181.463) / 1572.951)
=0.19420243 / 0.21290682
=0.9121

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
=203.9 / 204.761
=0.9958

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))
=(72.295 / (72.295 + 1181.463)) / (68.327 / (68.327 + 1180.303))
=0.05766264 / 0.05472157
=1.0537

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)
=(28.591 / 203.9) / (23.225 / 204.761)
=0.1402207 / 0.11342492
=1.2362

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)
=((849.09 + 69.154) / 1521.5) / ((865.877 + 61.608) / 1572.951)
=0.60351232 / 0.58964647
=1.0235

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
=(25.531 - 16.98 - 97.352) / 1521.5
=-0.0584

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 -2.89 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.

Inland Real Estate Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 10.99230.74311.00643.07260.05913.55881.22480.9210.9512
GMI 11.4370.82621.31061.0750.71490.96981.00651.01740.9837
AQI 1.16470.64961.33750.88671.02140.3523.7660.97621.1830.9121
SGI 0.98911.04820.99490.89360.28883.23450.97681.20981.11660.9958
DEPI 1.00130.9960.87070.93082.56130.11472.94410.9850.96141.0537
SGAI 1.19571.05911.0971.08860.03140.09831.22610.96251.01771.2362
LVGI 0.29184.27481.00380.41760.9262.43530.97170.9720.94261.0235
TATA -0.0347-0.0372-0.0301-0.0636-0.0155-0.2419-0.0466-0.0395-0.0449-0.0584
M-score -2.39-3.61-2.85-2.58-0.86-10.190.93-2.26-2.56-2.89

Inland Real Estate Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.2021.23241.32070.85710.80240.9210.93481.0030.97380.9512
GMI 0.93770.9511.01941.01821.02871.01750.98340.98220.98110.9837
AQI 1.04130.97620.83231.05761.1521.1831.11041.01960.92870.9121
SGI 1.14531.20231.32171.35371.24851.11661.00910.97540.98670.9958
DEPI 1.12160.9850.96330.66920.75610.96141.05121.17611.15851.0537
SGAI 0.97470.96920.92940.89640.97481.0171.05311.05291.01051.2362
LVGI 0.97930.9721.00072.34471.01330.94260.93690.91810.90431.0235
TATA -0.0315-0.0395-0.0435-0.0487-0.0465-0.0449-0.0489-0.0504-0.0587-0.0584
M-score -2.30-2.29-2.15-2.95-2.61-2.56-2.71-2.70-2.78-2.89
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