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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 -2.66 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Macerich Co was 11.76. The lowest was -3.80. And the median was -2.66.
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 * 0.9319||+||0.528 * 1.0042||+||0.404 * 0.919||+||0.892 * 1.0899||+||0.115 * 0.944|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0813||+||4.679 * -0.0309||-||0.327 * 1.0186|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $98 Mil.|
Revenue was 254.337 + 264.512 + 256.568 + 266.556 = $1,042 Mil.
Gross Profit was 151.576 + 151.364 + 151.248 + 157.336 = $612 Mil.
Total Current Assets was $170 Mil.
Total Assets was $9,062 Mil.
Property, Plant and Equipment(Net PPE) was $7,556 Mil.
Depreciation, Depletion and Amortization(DDA) was $366 Mil.
Selling, General & Admin. Expense(SGA) was $27 Mil.
Total Current Liabilities was $374 Mil.
Long-Term Debt was $4,760 Mil.
Net Income was 16.088 + 17.819 + 144.878 + 38.123 = $217 Mil.
Non Operating Income was 11.691 + 11.591 + 10.377 + 33.102 = $67 Mil.
Cash Flow from Operations was 92.661 + 97.911 + 93.179 + 146.069 = $430 Mil.
|Accounts Receivable was $96 Mil.
Revenue was 245.878 + 243.304 + 251.163 + 215.669 = $956 Mil.
Gross Profit was 144.38 + 141.551 + 150.233 + 127.296 = $563 Mil.
Total Current Assets was $239 Mil.
Total Assets was $9,550 Mil.
Property, Plant and Equipment(Net PPE) was $7,779 Mil.
Depreciation, Depletion and Amortization(DDA) was $354 Mil.
Selling, General & Admin. Expense(SGA) was $23 Mil.
Total Current Liabilities was $392 Mil.
Long-Term Debt was $4,919 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)|
|=||(97.9 / 1041.973)||/||(96.388 / 956.014)|
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)|
|=||(151.364 / 956.014)||/||(151.576 / 1041.973)|
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 - (169.823 + 7556.064) / 9062.263)||/||(1 - (238.653 + 7778.785) / 9549.889)|
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))|
|=||(354.266 / (354.266 + 7778.785))||/||(365.542 / (365.542 + 7556.064))|
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)|
|=||(27.055 / 1041.973)||/||(22.957 / 956.014)|
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)|
|=||((4760.107 + 373.551) / 9062.263)||/||((4919.036 + 391.842) / 9549.889)|
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|
|=||(216.908 - 66.761||-||429.82)||/||9062.263|
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 -2.66 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