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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 11.40. The lowest was -3.63. And the median was -2.55.
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 * 0.9429||+||0.528 * 0.9587||+||0.404 * 1.7027||+||0.892 * 1.0576||+||0.115 * 0.6638|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9187||+||4.679 * -0.0436||-||0.327 * 0.9252|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $113 Mil.|
Revenue was 256 + 320.758 + 326.262 + 322.794 = $1,226 Mil.
Gross Profit was 148.776 + 206.813 + 210.3 + 208.678 = $775 Mil.
Total Current Assets was $262 Mil.
Total Assets was $10,211 Mil.
Property, Plant and Equipment(Net PPE) was $7,527 Mil.
Depreciation, Depletion and Amortization(DDA) was $424 Mil.
Selling, General & Admin. Expense(SGA) was $30 Mil.
Total Current Liabilities was $440 Mil.
Long-Term Debt was $4,659 Mil.
Net Income was 420.915 + 414.959 + 33.597 + 14.395 = $884 Mil.
Non Operating Income was 439.252 + 399.276 + 4.494 + -0.013 = $843 Mil.
Cash Flow from Operations was 107.841 + 126.726 + 140.772 + 110.749 = $486 Mil.
|Accounts Receivable was $114 Mil.
Revenue was 318.335 + 322.909 + 263.492 + 254.337 = $1,159 Mil.
Gross Profit was 190.203 + 203.748 + 156.632 + 151.576 = $702 Mil.
Total Current Assets was $247 Mil.
Total Assets was $13,197 Mil.
Property, Plant and Equipment(Net PPE) was $11,111 Mil.
Depreciation, Depletion and Amortization(DDA) was $407 Mil.
Selling, General & Admin. Expense(SGA) was $31 Mil.
Total Current Liabilities was $647 Mil.
Long-Term Debt was $6,474 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)|
|=||(113.188 / 1225.814)||/||(113.505 / 1159.073)|
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)|
|=||(702.159 / 1159.073)||/||(774.567 / 1225.814)|
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 - (261.926 + 7526.652) / 10211.345)||/||(1 - (246.89 + 11110.841) / 13196.667)|
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))|
|=||(407.382 / (407.382 + 11110.841))||/||(423.591 / (423.591 + 7526.652))|
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)|
|=||(30.077 / 1225.814)||/||(30.957 / 1159.073)|
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)|
|=||((4658.968 + 439.572) / 10211.345)||/||((6474.354 + 647.161) / 13196.667)|
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|
|=||(883.866 - 843.009||-||486.088)||/||10211.345|
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 -2.42 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