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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
-2.41 (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 -2.41 suggests that the company is not a manipulator.

PLD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.54   Max: 5.08
Current: -2.41

-3.54
5.08

During the past 13 years, the highest Beneish M-Score of Prologis Inc was 5.08. The lowest was -3.54. And the median was -2.52.


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 * 0.9582+0.404 * 0.9569+0.892 * 1.2751+0.115 * 0.7969
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8647+4.679 * -0.0325-0.327 * 0.9606
=-2.41

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 704.565 + 602.155 + 606.3 + 643.201 = $2,556 Mil.
Gross Profit was 519.427 + 433.564 + 434.426 + 481.429 = $1,869 Mil.
Total Current Assets was $375 Mil.
Total Assets was $30,888 Mil.
Property, Plant and Equipment(Net PPE) was $23,932 Mil.
Depreciation, Depletion and Amortization(DDA) was $978 Mil.
Selling, General & Admin. Expense(SGA) was $246 Mil.
Total Current Liabilities was $672 Mil.
Long-Term Debt was $11,257 Mil.
Net Income was 280.926 + 277.079 + 209.73 + 119.995 = $888 Mil.
Non Operating Income was 162.915 + 233.513 + 192.553 + 99.54 = $689 Mil.
Cash Flow from Operations was 418.92 + 311.821 + 266.27 + 206.853 = $1,204 Mil.
Accounts Receivable was $0 Mil.
Revenue was 580.622 + 510.404 + 462.847 + 450.865 = $2,005 Mil.
Gross Profit was 413.806 + 359.637 + 310.57 + 320.441 = $1,404 Mil.
Total Current Assets was $310 Mil.
Total Assets was $31,419 Mil.
Property, Plant and Equipment(Net PPE) was $24,113 Mil.
Depreciation, Depletion and Amortization(DDA) was $779 Mil.
Selling, General & Admin. Expense(SGA) was $223 Mil.
Total Current Liabilities was $698 Mil.
Long-Term Debt was $11,934 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 / 2556.221) / (0 / 2004.738)
=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)
=(1404.454 / 2004.738) / (1868.846 / 2556.221)
=0.70056736 / 0.73109719
=0.9582

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 - (375.12 + 23932.016) / 30888.209) / (1 - (310.433 + 24112.913) / 31419.354)
=0.21306101 / 0.22266556
=0.9569

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
=2556.221 / 2004.738
=1.2751

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))
=(778.869 / (778.869 + 24112.913)) / (978.155 / (978.155 + 23932.016))
=0.03129021 / 0.03926729
=0.7969

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)
=(246.375 / 2556.221) / (223.445 / 2004.738)
=0.09638251 / 0.11145845
=0.8647

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)
=((11256.997 + 672.111) / 30888.209) / ((11934.355 + 697.86) / 31419.354)
=0.38620264 / 0.40205203
=0.9606

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
=(887.73 - 688.521 - 1203.864) / 30888.209
=-0.0325

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 -2.41 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.45720.84321.08960.27841.48280.83830.706701
GMI 1.16840.99841.05360.98480.99780.99891.03770.98610.9832
AQI 13.15541.00341.00740.24760.72260.76341.79881.00460.938
SGI 0.94371.03320.89171.35851.69231.37890.89291.00591.2478
DEPI 0.0291132.63491.17890.81610.90751.09480.9149
SGAI 1.32721.0750.90011.04960.69480.84751.12561.07470.7705
LVGI 1.01121.13120.87280.90510.93731.04730.85810.99211.0166
TATA -0.0212-0.0636-0.0474-0.064-0.0161-0.0289-0.0214-0.0289-0.0299
M-score 2.62-2.95-2.630.22-1.51-2.53-2.59-3.53-2.41

Prologis Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.0610.990400001111
GMI 0.99980.99070.98610.99471.00350.99910.98320.96350.96080.9582
AQI 1.30981.30091.00461.0240.79330.78170.9380.86980.95520.9569
SGI 0.93480.97011.00591.04911.04831.14771.24781.30831.32241.2751
DEPI 1.03410.94611.09481.02281.34431.1730.91490.87260.67920.7969
SGAI 1.13591.11321.07470.95180.89790.79510.77050.76940.80580.8647
LVGI 1.00460.98450.99210.93331.0571.03181.01661.10430.95540.9606
TATA -0.0239-0.0248-0.029-0.0287-0.0225-0.0326-0.0301-0.0359-0.037-0.0325
M-score -2.49-2.54-3.54-3.45-3.51-3.46-2.41-2.45-2.39-2.41
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