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Investors Real Estate Trust (NYSE:IRET)
Beneish M-Score
-2.98 (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 -2.98 suggests that the company is not a manipulator.

IRET' s Beneish M-Score Range Over the Past 10 Years
Min: -11.07   Max: 5.45
Current: -2.98

-11.07
5.45

During the past 13 years, the highest Beneish M-Score of Investors Real Estate Trust was 5.45. The lowest was -11.07. And the median was -2.28.


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 * 0.6072+0.528 * 1.0204+0.404 * 0.4008+0.892 * 1.0502+0.115 * 1.2681
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9074+4.679 * -0.0044-0.327 * 0.9389
=-2.98

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $1.5 Mil.
Revenue was 29.322 + 55.772 + 52.27 + 50.956 = $188.3 Mil.
Gross Profit was 13.218 + 40.767 + 37.672 + 37.804 = $129.5 Mil.
Total Current Assets was $66.7 Mil.
Total Assets was $1,760.2 Mil.
Property, Plant and Equipment(Net PPE) was $1,442.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $65.5 Mil.
Selling, General & Admin. Expense(SGA) was $11.3 Mil.
Total Current Liabilities was $134.9 Mil.
Long-Term Debt was $899.5 Mil.
Net Income was 11.003 + 39.797 + 16.666 + 4.54 = $72.0 Mil.
Non Operating Income was 11.824 + 1.581 + -0.006 + -0.124 = $13.3 Mil.
Cash Flow from Operations was 19.554 + 12.621 + 9.536 + 24.782 = $66.5 Mil.
Accounts Receivable was $2.4 Mil.
Revenue was 25.979 + 52.939 + 51.189 + 49.214 = $179.3 Mil.
Gross Profit was 11.024 + 39.495 + 38.549 + 36.718 = $125.8 Mil.
Total Current Assets was $49.3 Mil.
Total Assets was $1,997.8 Mil.
Property, Plant and Equipment(Net PPE) was $1,237.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $72.1 Mil.
Selling, General & Admin. Expense(SGA) was $11.8 Mil.
Total Current Liabilities was $517.3 Mil.
Long-Term Debt was $733.2 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)
=(1.524 / 188.32) / (2.39 / 179.321)
=0.00809261 / 0.01332805
=0.6072

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)
=(125.786 / 179.321) / (129.461 / 188.32)
=0.70145716 / 0.68745221
=1.0204

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 - (66.748 + 1442.213) / 1760.177) / (1 - (49.299 + 1237.118) / 1997.837)
=0.14272201 / 0.35609512
=0.4008

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
=188.32 / 179.321
=1.0502

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))
=(72.078 / (72.078 + 1237.118)) / (65.455 / (65.455 + 1442.213))
=0.05505516 / 0.04341473
=1.2681

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)
=(11.267 / 188.32) / (11.824 / 179.321)
=0.05982901 / 0.06593762
=0.9074

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)
=((899.454 + 134.939) / 1760.177) / ((733.176 + 517.339) / 1997.837)
=0.5876642 / 0.62593445
=0.9389

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
=(72.006 - 13.275 - 66.493) / 1760.177
=-0.0044

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 -2.98 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 1.17341.17260.60611.86131.13541.27914.14621.81030.05760.6072
GMI 01.35251.0121.00061.02890.96590.98561.07590.98771.0204
AQI 0.56991.43480.904919.55311.00490.9980.97461.02270.37440.4008
SGI 1.14321.11961.08520.96461.01150.97651.08480.66351.08951.0502
DEPI 0.98210.98530.91950.03861.00490.99580.99471.004617.75871.2681
SGAI 1.62571.02380.9341.2850.95291.15871.05111.32411.01020.9074
LVGI 1.07150.99351.0180.96140.991.00740.88720.98291.08410.9389
TATA -0.0309-0.0312-0.0323-0.0358-0.0241-0.0336-0.0279-0.0566-0.0485-0.0044
M-score -3.17-2.00-2.955.46-2.43-2.450.37-2.30-1.86-2.98

Investors Real Estate Trust Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 1.33221.82810.33550.21260.28560.05762.25584.12332.60740.6072
GMI 1.01031.07691.07911.08411.09070.98770.98490.99110.98931.0204
AQI 0.99691.02271.01881.01181.00840.37441.0181.00241.00560.4008
SGI 1.12090.65710.5840.51960.45021.08951.21761.3581.55931.0502
DEPI 1.0041.00461.00581.00580.999217.75870.9970.99760.99861.2681
SGAI 1.22661.24811.43051.34681.44851.07840.75610.7360.66150.9074
LVGI 0.94410.98291.00210.99520.98781.08411.10191.05681.02620.9389
TATA -0.0301-0.0566-0.0581-0.0649-0.064-0.0485-0.0476-0.036-0.0102-0.0044
M-score -2.22-2.28-3.76-3.94-3.95-1.87-1.350.57-0.50-2.98
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