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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.
Investors Real Estate Trust has a M-score of -3.49 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Investors Real Estate Trust was 6.71. The lowest was -3.49. And the median was -2.43.
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 Investors Real Estate 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 * 0.1852||+||0.528 * 1.0099||+||0.404 * 1.0188||+||0.892 * 1.0582||+||0.115 * 1.0058|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.273||+||4.679 * -0.0584||-||0.327 * 1.0021|
|This Year (Jul14) TTM:||Last Year (Jul13) TTM:|
|Accounts Receivable was $7.0 Mil.|
Revenue was 68.63 + 66.983 + 67.629 + 66.19 = $269.4 Mil.
Gross Profit was 51.349 + 47.222 + 50.571 + 49.528 = $198.7 Mil.
Total Current Assets was $102.4 Mil.
Total Assets was $1,931.8 Mil.
Property, Plant and Equipment(Net PPE) was $1.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $71.1 Mil.
Selling, General & Admin. Expense(SGA) was $18.0 Mil.
Total Current Liabilities was $98.0 Mil.
Long-Term Debt was $1,017.6 Mil.
Net Income was -0.151 + -28.542 + 3.503 + 8.787 = $-16.4 Mil.
Non Operating Income was -2.862 + 0.472 + 0.167 + 0.067 = $-2.2 Mil.
Cash Flow from Operations was 23.385 + 32.41 + 23.923 + 18.897 = $98.6 Mil.
|Accounts Receivable was $35.8 Mil.
Revenue was 65.098 + 64.184 + 63.08 + 62.258 = $254.6 Mil.
Gross Profit was 48.134 + 47.563 + 46.947 + 46.961 = $189.6 Mil.
Total Current Assets was $134.1 Mil.
Total Assets was $1,896.6 Mil.
Property, Plant and Equipment(Net PPE) was $1.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $70.9 Mil.
Selling, General & Admin. Expense(SGA) was $13.3 Mil.
Total Current Liabilities was $62.6 Mil.
Long-Term Debt was $1,030.4 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)|
|=||(7.013 / 269.432)||/||(35.793 / 254.62)|
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)|
|=||(47.222 / 254.62)||/||(51.349 / 269.432)|
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 - (102.417 + 1.641) / 1931.767)||/||(1 - (134.104 + 1.217) / 1896.642)|
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))|
|=||(70.922 / (70.922 + 1.217))||/||(71.099 / (71.099 + 1.641))|
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)|
|=||(17.955 / 269.432)||/||(13.329 / 254.62)|
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)|
|=||((1017.574 + 98.017) / 1931.767)||/||((1030.407 + 62.563) / 1896.642)|
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|
|=||(-16.403 - -2.156||-||98.615)||/||1931.767|
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.
Investors Real Estate Trust has a M-score of -3.49 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
Investors Real Estate Trust Annual Data
Investors Real Estate Trust Quarterly Data