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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 -2.30. The lowest was -3.32. And the median was -2.67.
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 * 1.236||+||0.528 * 0.9812||+||0.404 * 0.995||+||0.892 * 1.0736||+||0.115 * 1.422|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9864||+||4.679 * -0.0335||-||0.327 * 0.9606|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $132 Mil.|
Revenue was 322.909 + 263.492 + 254.337 + 264.512 = $1,105 Mil.
Gross Profit was 203.748 + 156.632 + 151.576 + 151.364 = $663 Mil.
Total Current Assets was $230 Mil.
Total Assets was $13,122 Mil.
Property, Plant and Equipment(Net PPE) was $11,068 Mil.
Depreciation, Depletion and Amortization(DDA) was $379 Mil.
Selling, General & Admin. Expense(SGA) was $29 Mil.
Total Current Liabilities was $684 Mil.
Long-Term Debt was $6,292 Mil.
Net Income was 1429.221 + 35.914 + 16.088 + 17.819 = $1,499 Mil.
Non Operating Income was 1500.134 + 14.745 + 11.691 + 11.591 = $1,538 Mil.
Cash Flow from Operations was 103.8 + 106.334 + 92.661 + 97.911 = $401 Mil.
|Accounts Receivable was $99 Mil.
Revenue was 282.14 + 258.154 + 245.878 + 243.304 = $1,029 Mil.
Gross Profit was 168.522 + 151.769 + 144.38 + 141.551 = $606 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 $4,583 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)|
|=||(132.026 / 1105.25)||/||(99.497 / 1029.476)|
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)|
|=||(156.632 / 1029.476)||/||(203.748 / 1105.25)|
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 - (230.463 + 11067.89) / 13121.778)||/||(1 - (186.055 + 7621.766) / 9075.25)|
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))|
|=||(376.276 / (376.276 + 7621.766))||/||(378.702 / (378.702 + 11067.89))|
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)|
|=||(29.412 / 1105.25)||/||(27.772 / 1029.476)|
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)|
|=||((6292.4 + 684.122) / 13121.778)||/||((4582.727 + 440.099) / 9075.25)|
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|
|=||(1499.042 - 1538.161||-||400.706)||/||13121.778|
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 -2.30 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