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Investors Real Estate Trust (NYSE:IRET)
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.

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

IRET' s 10-Year Beneish M-Score Range
Min: -2.95   Max: 5.45
Current: -2.89

-2.95
5.45

During the past 13 years, the highest Beneish M-Score of Investors Real Estate Trust was 5.45. The lowest was -2.95. And the median was -2.52.


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 * 0.7577+0.528 * 0.9848+0.404 * 1.0055+0.892 * 1.0602+0.115 * 0.9986
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1439+4.679 * -0.0485-0.327 * 0.9591
=-2.89

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $30.6 Mil.
Revenue was 70.759 + 72.916 + 70.885 + 68.63 = $283.2 Mil.
Gross Profit was 51.838 + 53.952 + 53.259 + 51.349 = $210.4 Mil.
Total Current Assets was $85.6 Mil.
Total Assets was $1,997.8 Mil.
Property, Plant and Equipment(Net PPE) was $1.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $72.1 Mil.
Selling, General & Admin. Expense(SGA) was $18.5 Mil.
Total Current Liabilities was $131.6 Mil.
Long-Term Debt was $974.8 Mil.
Net Income was 10.753 + 8.371 + 5.114 + -0.151 = $24.1 Mil.
Non Operating Income was 7.251 + 1.06 + 1.367 + -2.862 = $6.8 Mil.
Cash Flow from Operations was 33.405 + 28.553 + 28.836 + 23.385 = $114.2 Mil.
Accounts Receivable was $38.1 Mil.
Revenue was 67.806 + 68.433 + 65.772 + 65.098 = $267.1 Mil.
Gross Profit was 47.385 + 50.704 + 49.215 + 48.134 = $195.4 Mil.
Total Current Assets was $89.7 Mil.
Total Assets was $1,869.2 Mil.
Property, Plant and Equipment(Net PPE) was $1.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $73.7 Mil.
Selling, General & Admin. Expense(SGA) was $15.2 Mil.
Total Current Liabilities was $81.6 Mil.
Long-Term Debt was $997.7 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)
=(30.604 / 283.19) / (38.098 / 267.109)
=0.10806879 / 0.14263091
=0.7577

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)
=(53.952 / 267.109) / (51.838 / 283.19)
=0.73167883 / 0.74295703
=0.9848

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 - (85.581 + 1.542) / 1997.837) / (1 - (89.682 + 1.681) / 1869.221)
=0.95639134 / 0.95112242
=1.0055

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
=283.19 / 267.109
=1.0602

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))
=(73.723 / (73.723 + 1.681)) / (72.078 / (72.078 + 1.542))
=0.97770675 / 0.9790546
=0.9986

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)
=(18.469 / 283.19) / (15.229 / 267.109)
=0.0652177 / 0.05701418
=1.1439

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)
=((974.828 + 131.572) / 1997.837) / ((997.689 + 81.605) / 1869.221)
=0.55379893 / 0.5774031
=0.9591

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
=(24.087 - 6.816 - 114.179) / 1997.837
=-0.0485

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 -2.89 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.

Investors Real Estate Trust Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 1.17341.17260.60611.86131.13541.22344.33491.11550.7577
GMI 01.35251.0121.00061.02890.95980.99191.01880.9915
AQI 0.56991.43480.904919.55311.00490.9980.97461.02271.0055
SGI 1.14321.11961.08520.96461.01151.02091.03761.07681.0602
DEPI 0.98210.98530.91950.03861.00490.99580.99471.00460.9986
SGAI 1.62571.02380.9341.2850.95291.12471.08291.20821.0473
LVGI 1.07150.99351.0180.96140.991.00740.88720.98290.9591
TATA -0.0309-0.0312-0.0323-0.0358-0.0241-0.0336-0.0279-0.0568-0.0485
M-score -3.17-2.00-2.955.46-2.43-2.460.50-2.58-2.87

Investors Real Estate Trust Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 7.02854.29985.251711.10041.39121.12640.18430.10340.12090.7577
GMI 0.95430.99060.99821.01321.01551.01981.01451.01111.01020.9848
AQI 0.98520.97460.96851.00550.99691.02271.01881.01181.00841.0055
SGI 1.03861.0461.0571.06251.07331.06631.06291.06831.06361.0602
DEPI 0.99590.99470.99620.99591.0041.00461.00581.00580.99920.9986
SGAI 1.06561.07691.16391.28861.26351.16381.21881.13731.1161.1439
LVGI 0.89520.88720.87310.95480.94410.98291.00210.99520.98780.9591
TATA -0.0317-0.0279-0.0289-0.0275-0.0301-0.0568-0.0583-0.065-0.0641-0.0485
M-score 2.940.471.356.71-2.22-2.57-3.47-3.56-3.54-2.89
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