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Investors Real Estate Trust (NYSE:IRET)
Beneish M-Score
-2.95 (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.

Investors Real Estate Trust has a M-score of -2.95 suggests that the company is not a manipulator.

IRET' s Beneish M-Score Range Over the Past 10 Years
Min: -300.58   Max: 6.68
Current: -2.95

-300.58
6.68

During the past 13 years, the highest Beneish M-Score of Investors Real Estate Trust was 6.68. The lowest was -300.58. And the median was -2.26.


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 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 * 0.5944+0.528 * 1.0372+0.404 * 0.9963+0.892 * 0.9596+0.115 * 0.996
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.002+4.679 * -0.0204-0.327 * 0.9532
=-2.95

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Accounts Receivable was $11.0 Mil.
Revenue was 49.611 + 29.322 + 55.772 + 52.27 = $187.0 Mil.
Gross Profit was 33.554 + 13.218 + 40.767 + 37.672 = $125.2 Mil.
Total Current Assets was $67.4 Mil.
Total Assets was $1,691.5 Mil.
Property, Plant and Equipment(Net PPE) was $1.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $61.4 Mil.
Selling, General & Admin. Expense(SGA) was $10.3 Mil.
Total Current Liabilities was $135.5 Mil.
Long-Term Debt was $890.6 Mil.
Net Income was -21.643 + 11.003 + 39.797 + 16.666 = $45.8 Mil.
Non Operating Income was 9.431 + 11.824 + 1.581 + -0.006 = $22.8 Mil.
Cash Flow from Operations was 15.755 + 19.554 + 12.621 + 9.536 = $57.5 Mil.
Accounts Receivable was $19.3 Mil.
Revenue was 45.045 + 25.979 + 52.939 + 70.885 = $194.8 Mil.
Gross Profit was 31.557 + 11.024 + 39.495 + 53.259 = $135.3 Mil.
Total Current Assets was $73.2 Mil.
Total Assets was $2,024.7 Mil.
Property, Plant and Equipment(Net PPE) was $1.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $73.3 Mil.
Selling, General & Admin. Expense(SGA) was $10.7 Mil.
Total Current Liabilities was $452.8 Mil.
Long-Term Debt was $835.6 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)
=(10.986 / 186.975) / (19.262 / 194.848)
=0.05875652 / 0.09885654
=0.5944

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)
=(135.335 / 194.848) / (125.211 / 186.975)
=0.69456705 / 0.66966707
=1.0372

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 - (67.404 + 0.977) / 1691.543) / (1 - (73.199 + 1.464) / 2024.673)
=0.95957478 / 0.96312343
=0.9963

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
=186.975 / 194.848
=0.9596

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))
=(73.324 / (73.324 + 1.464)) / (61.413 / (61.413 + 0.977))
=0.98042467 / 0.98434044
=0.996

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)
=(10.319 / 186.975) / (10.732 / 194.848)
=0.0551892 / 0.05507883
=1.002

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)
=((890.563 + 135.492) / 1691.543) / ((835.607 + 452.818) / 2024.673)
=0.60657932 / 0.63636202
=0.9532

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
=(45.823 - 22.83 - 57.466) / 1691.543
=-0.0204

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 -2.95 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.

Investors Real Estate Trust Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 1.17341.17260.60611.7751.19071.20970.59938.21040.09290.6072
GMI 11.35251.0121.0041.02540.95960.98591.02051.04791.0204
AQI 0.56991.43480.90490.985519.93790.99920.97341.02270.37440.4008
SGI 1.14321.11961.08521.01150.96461.03251.07291.02340.67551.0502
DEPI 0.98210.98530.91950.9650.04020.99580.99471.004617.75871.2681
SGAI 1.62571.02380.9341.26150.97071.1171.05911.25141.10040.9074
LVGI 1.07150.99351.0180.96140.991.00740.88720.98291.08410.9389
TATA -0.0309-0.0312-0.0324-0.0358-0.0241-0.0337-0.0279-0.0569-0.0485-0.0044
M-score -2.64-2.00-2.95-1.965.11-2.46-2.913.89-2.18-2.98

Investors Real Estate Trust Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
DSRI 8.14710.19240.10710.13250.0773.7988.71015.89050.76360.5944
GMI 1.01941.01471.00941.011.03571.06161.08661.09121.05141.0372
AQI 1.02271.01881.01181.00840.37441.0181.00241.00560.40080.9963
SGI 1.03141.01831.03110.97080.81510.72320.64290.69020.83510.9596
DEPI 1.00461.00581.00580.999217.75870.9970.99760.99861.26810.996
SGAI 1.24471.30451.31171.35141.10460.82650.74580.70330.84721.002
LVGI 0.98291.00210.99520.98781.08411.10191.05681.02620.93890.9532
TATA -0.0569-0.0584-0.0651-0.0642-0.0485-0.0476-0.036-0.0102-0.0044-0.0204
M-score 3.84-3.52-3.62-3.65-2.07-0.344.201.79-3.00-2.95
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