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GuruFocus has detected 2 Warning Signs with Kimco Realty Corp $KIM.
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Kimco Realty Corp (NYSE:KIM)
Beneish M-Score
-2.49 (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.

Kimco Realty Corp has a M-score of -2.49 suggests that the company is not a manipulator.

KIM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.39   Max: 1.02
Current: -2.49

-3.39
1.02

During the past 13 years, the highest Beneish M-Score of Kimco Realty Corp was 1.02. The lowest was -3.39. And the median was -2.48.


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 Kimco Realty 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 * 0.9432+0.528 * 0.9897+0.404 * 0.7288+0.892 * 1.0391+0.115 * 0.9739
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0138+4.679 * 0.0219-0.327 * 0.9292
=-2.49

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $195 Mil.
Revenue was 285.076 + 291.488 + 297.202 + 300.87 = $1,175 Mil.
Gross Profit was 212.055 + 219.746 + 225.359 + 220.141 = $877 Mil.
Total Current Assets was $374 Mil.
Total Assets was $11,206 Mil.
Property, Plant and Equipment(Net PPE) was $9,682 Mil.
Depreciation, Depletion and Amortization(DDA) was $351 Mil.
Selling, General & Admin. Expense(SGA) was $123 Mil.
Total Current Liabilities was $118 Mil.
Long-Term Debt was $5,000 Mil.
Net Income was -43.545 + 203.409 + 140.713 + 379.201 = $680 Mil.
Non Operating Income was -41.793 + -1.656 + -0.17 + 2.577 = $-41 Mil.
Cash Flow from Operations was 228.679 + 78.891 + 136.956 + 31.059 = $476 Mil.
Accounts Receivable was $199 Mil.
Revenue was 288.382 + 294.061 + 283.456 + 264.513 = $1,130 Mil.
Gross Profit was 213.983 + 218.24 + 209.928 + 193.418 = $836 Mil.
Total Current Assets was $392 Mil.
Total Assets was $11,414 Mil.
Property, Plant and Equipment(Net PPE) was $9,414 Mil.
Depreciation, Depletion and Amortization(DDA) was $332 Mil.
Selling, General & Admin. Expense(SGA) was $117 Mil.
Total Current Liabilities was $111 Mil.
Long-Term Debt was $5,499 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)
=(195.011 / 1174.636) / (198.965 / 1130.412)
=0.16601824 / 0.17601105
=0.9432

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)
=(835.569 / 1130.412) / (877.301 / 1174.636)
=0.73917209 / 0.74687052
=0.9897

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 - (373.697 + 9682.085) / 11206.102) / (1 - (392.067 + 9414.247) / 11413.984)
=0.10265122 / 0.14085091
=0.7288

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
=1174.636 / 1130.412
=1.0391

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))
=(331.611 / (331.611 + 9414.247)) / (350.531 / (350.531 + 9682.085))
=0.03402584 / 0.03493914
=0.9739

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)
=(123.253 / 1174.636) / (116.998 / 1130.412)
=0.10492868 / 0.10350032
=1.0138

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)
=((5000.041 + 118.136) / 11206.102) / ((5498.586 + 111.48) / 11413.984)
=0.45673125 / 0.49150814
=0.9292

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
=(679.778 - -41.042 - 475.585) / 11206.102
=0.0219

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.

Kimco Realty Corp has a M-score of -2.49 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 local exchange's currency.

Kimco Realty Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.31150.8711.20311.15462.07660.93130.73971.09770.6882
GMI 00.98591.02530.99290.99460.98610.99491.00421.001
AQI 0.65190.91720.98461.09960.93230.97850.94710.77730.8915
SGI 1.14811.22261.00740.99520.98510.97411.08591.15361.1739
DEPI 0.92690.97251.02570.86340.99120.97351.02411.04910.9317
SGAI 1.17020.91480.9231.01411.10381.06960.95030.8310.8556
LVGI 1.49651.03360.8460.95741.02831.00381.01971.02351.027
TATA -0.031-0.031-0.0324-0.0343-0.0311-0.0219-0.0351-0.01950.0348
M-score -4.00-2.59-2.36-2.47-1.71-2.70-2.83-2.41-2.48

Kimco Realty Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.70830.76911.12211.16280.88780.89450.68820.69890.91180.9432
GMI 0.99781.00321.0031.0021.00180.99971.0010.99450.99050.9897
AQI 0.87030.89310.77730.72240.7790.75710.89150.9260.83540.7288
SGI 1.11761.16151.12861.18971.21821.20971.17391.12521.07351.0391
DEPI 1.05311.0641.04911.14811.04710.95120.93170.79970.84360.9739
SGAI 0.92710.870.84930.75810.75850.76850.85560.92020.9651.0138
LVGI 1.22911.03671.02351.08991.03831.05351.0270.94410.94540.9292
TATA -0.0337-0.0112-0.01950.00350.0086-0.00120.03480.02240.0330.0219
M-score -2.91-2.62-2.41-2.23-2.40-2.48-2.48-2.56-2.41-2.49
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