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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.
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.
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|
|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
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)|
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)|
|=||(835.569 / 1130.412)||/||(877.301 / 1174.636)|
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 - (373.697 + 9682.085) / 11206.102)||/||(1 - (392.067 + 9414.247) / 11413.984)|
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))|
|=||(331.611 / (331.611 + 9414.247))||/||(350.531 / (350.531 + 9682.085))|
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)|
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)|
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|
|=||(679.778 - -41.042||-||475.585)||/||11206.102|
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.
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
Kimco Realty Corp Annual Data
Kimco Realty Corp Quarterly Data