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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.
The Macerich Company has a M-score of -2.61 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of The Macerich Company was -2.55. The lowest was -3.32. And the median was -2.71.
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 The Macerich Company 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 * 0.7489||+||0.528 * 0.9823||+||0.404 * 0.8337||+||0.892 * 1.2807||+||0.115 * 0.8651|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0623||+||4.679 * -0.0165||-||0.327 * 0.9073|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $99 Mil.|
Revenue was 256.568 + 266.556 + 256.977 + 262.782 = $1,043 Mil.
Gross Profit was 151.248 + 157.336 + 151.655 + 154.261 = $615 Mil.
Total Current Assets was $186 Mil.
Total Assets was $9,075 Mil.
Property, Plant and Equipment(Net PPE) was $7,622 Mil.
Depreciation, Depletion and Amortization(DDA) was $376 Mil.
Selling, General & Admin. Expense(SGA) was $28 Mil.
Total Current Liabilities was $440 Mil.
Long-Term Debt was $4,313 Mil.
Net Income was 144.878 + 38.123 + 218.997 + 18.092 = $420 Mil.
Non Operating Income was 10.377 + 33.102 + 88.12 + 16.074 = $148 Mil.
Cash Flow from Operations was 93.179 + 146.069 + 75.244 + 107.543 = $422 Mil.
|Accounts Receivable was $104 Mil.
Revenue was 204.619 + 204.092 + 195.657 + 209.943 = $814 Mil.
Gross Profit was 119.371 + 120.14 + 109.891 + 121.918 = $471 Mil.
Total Current Assets was $272 Mil.
Total Assets was $9,311 Mil.
Property, Plant and Equipment(Net PPE) was $7,480 Mil.
Depreciation, Depletion and Amortization(DDA) was $317 Mil.
Selling, General & Admin. Expense(SGA) was $20 Mil.
Total Current Liabilities was $388 Mil.
Long-Term Debt was $4,987 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)|
|=||(99.497 / 1042.883)||/||(103.744 / 814.311)|
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)|
|=||(157.336 / 814.311)||/||(151.248 / 1042.883)|
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 - (186.055 + 7621.766) / 9075.25)||/||(1 - (271.862 + 7479.546) / 9311.209)|
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))|
|=||(317.315 / (317.315 + 7479.546))||/||(376.276 / (376.276 + 7621.766))|
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)|
|=||(27.772 / 1042.883)||/||(20.413 / 814.311)|
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)|
|=||((4313.346 + 440.099) / 9075.25)||/||((4986.761 + 388.425) / 9311.209)|
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|
|=||(420.09 - 147.673||-||422.035)||/||9075.25|
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.
The Macerich Company has a M-score of -2.61 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
The Macerich Company Annual Data
The Macerich Company Quarterly Data