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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 Macerich Co was -0.41. The lowest was -3.63. And the median was -2.56.
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 * 1.1868||+||0.528 * 1.0382||+||0.404 * 1.2116||+||0.892 * 0.8083||+||0.115 * 1.105|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1686||+||4.679 * -0.0363||-||0.327 * 1.0015|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $205 Mil.|
Revenue was 272 + 253.367 + 259.904 + 256 = $1,041 Mil.
Gross Profit was 171.082 + 153.772 + 161.695 + 148.776 = $635 Mil.
Total Current Assets was $349 Mil.
Total Assets was $9,958 Mil.
Property, Plant and Equipment(Net PPE) was $7,357 Mil.
Depreciation, Depletion and Amortization(DDA) was $343 Mil.
Selling, General & Admin. Expense(SGA) was $28 Mil.
Total Current Liabilities was $427 Mil.
Long-Term Debt was $4,966 Mil.
Net Income was 37.128 + 13.73 + 45.222 + 420.915 = $517 Mil.
Non Operating Income was 4.827 + -5.782 + 22.319 + 439.252 = $461 Mil.
Cash Flow from Operations was 98.447 + 111.378 + 99.84 + 107.841 = $418 Mil.
|Accounts Receivable was $214 Mil.
Revenue was 320.758 + 326.262 + 322.794 + 318.335 = $1,288 Mil.
Gross Profit was 206.813 + 210.3 + 208.678 + 190.203 = $816 Mil.
Total Current Assets was $342 Mil.
Total Assets was $11,236 Mil.
Property, Plant and Equipment(Net PPE) was $8,797 Mil.
Depreciation, Depletion and Amortization(DDA) was $455 Mil.
Selling, General & Admin. Expense(SGA) was $30 Mil.
Total Current Liabilities was $815 Mil.
Long-Term Debt was $5,261 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)|
|=||(205.225 / 1041.271)||/||(213.93 / 1288.149)|
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)|
|=||(815.994 / 1288.149)||/||(635.325 / 1041.271)|
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 - (349.222 + 7357.31) / 9958.148)||/||(1 - (341.829 + 8796.912) / 11235.584)|
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))|
|=||(454.81 / (454.81 + 8796.912))||/||(342.543 / (342.543 + 7357.31))|
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)|
|=||(28.217 / 1041.271)||/||(29.87 / 1288.149)|
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)|
|=||((4965.9 + 427.481) / 9958.148)||/||((5260.75 + 815.382) / 11235.584)|
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|
|=||(516.995 - 460.616||-||417.506)||/||9958.148|
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 -2.56 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