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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.
Macerich Co has a M-score of -2.57 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Macerich Co was 11.38. The lowest was -3.80. And the median was -2.68.
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 Macerich Co 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 * 0.8202||+||0.528 * 0.9892||+||0.404 * 0.8844||+||0.892 * 1.2323||+||0.115 * 0.8524|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0597||+||4.679 * -0.0151||-||0.327 * 0.9286|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $101 Mil.|
Revenue was 264.512 + 256.568 + 266.556 + 256.977 = $1,045 Mil.
Gross Profit was 151.364 + 151.248 + 157.336 + 151.655 = $612 Mil.
Total Current Assets was $182 Mil.
Total Assets was $9,008 Mil.
Property, Plant and Equipment(Net PPE) was $7,554 Mil.
Depreciation, Depletion and Amortization(DDA) was $372 Mil.
Selling, General & Admin. Expense(SGA) was $29 Mil.
Total Current Liabilities was $401 Mil.
Long-Term Debt was $4,611 Mil.
Net Income was 17.819 + 144.878 + 38.123 + 218.997 = $420 Mil.
Non Operating Income was 11.591 + 10.377 + 33.102 + 88.12 = $143 Mil.
Cash Flow from Operations was 97.911 + 93.179 + 146.069 + 75.244 = $412 Mil.
|Accounts Receivable was $100 Mil.
Revenue was 243.304 + 204.619 + 204.092 + 195.657 = $848 Mil.
Gross Profit was 141.551 + 119.371 + 120.14 + 109.891 = $491 Mil.
Total Current Assets was $270 Mil.
Total Assets was $9,763 Mil.
Property, Plant and Equipment(Net PPE) was $7,933 Mil.
Depreciation, Depletion and Amortization(DDA) was $330 Mil.
Selling, General & Admin. Expense(SGA) was $22 Mil.
Total Current Liabilities was $415 Mil.
Long-Term Debt was $5,434 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)|
|=||(100.838 / 1044.613)||/||(99.767 / 847.672)|
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)|
|=||(151.248 / 847.672)||/||(151.364 / 1044.613)|
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 - (181.572 + 7553.979) / 9008.391)||/||(1 - (270.321 + 7932.563) / 9762.684)|
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))|
|=||(330.154 / (330.154 + 7932.563))||/||(371.507 / (371.507 + 7553.979))|
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)|
|=||(28.625 / 1044.613)||/||(21.919 / 847.672)|
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)|
|=||((4611.132 + 401.334) / 9008.391)||/||((5434.465 + 415.332) / 9762.684)|
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|
|=||(419.817 - 143.19||-||412.403)||/||9008.391|
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.
Macerich Co has a M-score of -2.57 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
Macerich Co Annual Data
Macerich Co Quarterly Data