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GuruFocus has detected 5 Warning Signs with Prologis Inc $PLD.
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Prologis Inc (NYSE:PLD)
Beneish M-Score
-2.55 (As of Today)

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.

Prologis Inc has a M-score of -2.55 suggests that the company is not a manipulator.

PLD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.55   Max: 5.08
Current: -2.55

-3.55
5.08

During the past 13 years, the highest Beneish M-Score of Prologis Inc was 5.08. The lowest was -3.55. And the median was -2.56.


Definition

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 Prologis Inc 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+0.528 * 0.97+0.404 * 0.9139+0.892 * 1.153+0.115 * 0.9146
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8867+4.679 * -0.0397-0.327 * 0.939
=-2.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 620.115 + 704.565 + 602.155 + 606.3 = $2,533 Mil.
Gross Profit was 448.342 + 519.427 + 433.564 + 434.426 = $1,836 Mil.
Total Current Assets was $807 Mil.
Total Assets was $30,250 Mil.
Property, Plant and Equipment(Net PPE) was $23,464 Mil.
Depreciation, Depletion and Amortization(DDA) was $931 Mil.
Selling, General & Admin. Expense(SGA) was $222 Mil.
Total Current Liabilities was $556 Mil.
Long-Term Debt was $10,608 Mil.
Net Income was 442.197 + 280.926 + 277.079 + 209.73 = $1,210 Mil.
Non Operating Income was 405.116 + 162.915 + 233.513 + 192.553 = $994 Mil.
Cash Flow from Operations was 419.994 + 418.92 + 311.821 + 266.27 = $1,417 Mil.
Accounts Receivable was $0 Mil.
Revenue was 643.201 + 580.622 + 510.404 + 462.847 = $2,197 Mil.
Gross Profit was 460.457 + 413.806 + 359.637 + 310.57 = $1,544 Mil.
Total Current Assets was $264 Mil.
Total Assets was $31,395 Mil.
Property, Plant and Equipment(Net PPE) was $24,341 Mil.
Depreciation, Depletion and Amortization(DDA) was $880 Mil.
Selling, General & Admin. Expense(SGA) was $217 Mil.
Total Current Liabilities was $713 Mil.
Long-Term Debt was $11,627 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(0 / 2533.135) / (0 / 2197.074)
=0 / 0
=1

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1544.47 / 2197.074) / (1835.759 / 2533.135)
=0.70296676 / 0.72469845
=0.97

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (807.316 + 23463.788) / 30249.932) / (1 - (264.08 + 24341.262) / 31394.767)
=0.19764765 / 0.21625977
=0.9139

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2533.135 / 2197.074
=1.153

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))
=(880.373 / (880.373 + 24341.262)) / (930.985 / (930.985 + 23463.788))
=0.03490547 / 0.0381633
=0.9146

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)
=(222.067 / 2533.135) / (217.227 / 2197.074)
=0.08766489 / 0.09887104
=0.8867

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)
=((10608.294 + 556.179) / 30249.932) / ((11626.831 + 712.725) / 31394.767)
=0.36907432 / 0.39304499
=0.939

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1209.932 - 994.097 - 1417.005) / 30249.932
=-0.0397

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.

Prologis Inc has a M-score of -2.55 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Prologis Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.45720.84321.08960.27841.48280.83830.7067011
GMI 1.16840.99841.05360.98480.99780.99891.03771.00110.98170.97
AQI 13.15541.00341.00740.24760.72260.76341.79881.00460.92520.9139
SGI 0.94371.03320.89171.35851.69231.37890.89291.00591.24781.153
DEPI 0.0291132.63491.17890.81610.90751.09480.91840.9146
SGAI 1.32721.0750.90011.04960.69480.84751.12560.99470.75910.8867
LVGI 1.01121.13120.87280.90510.93731.04730.85810.99211.01660.939
TATA -0.0212-0.0636-0.0474-0.064-0.0161-0.0289-0.0214-0.0366-0.0358-0.0395
M-score 2.62-2.95-2.630.22-1.51-2.53-2.59-3.55-2.44-2.55

Prologis Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.9904000011111
GMI 0.99071.00111.00971.01821.01240.98170.96120.95830.95640.97
AQI 1.30091.00461.0240.79330.78170.92520.86980.95520.95690.9139
SGI 0.97011.00591.04911.04831.14771.24781.30831.32241.27511.153
DEPI 0.94611.09481.02281.34431.1730.91840.87260.67920.79690.9146
SGAI 1.11320.99470.87740.82510.72950.75910.76090.8010.86230.8867
LVGI 0.98450.99210.93331.0571.03181.01661.10430.95540.96060.939
TATA -0.0248-0.0367-0.0364-0.0288-0.0388-0.036-0.0418-0.043-0.0385-0.0397
M-score -2.54-3.55-3.47-3.51-3.48-2.44-2.48-2.42-2.44-2.55
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