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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 PS Business Parks Inc was 4.11. The lowest was -4.24. And the median was -2.84.
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 PS Business Parks 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 * 0.5171||+||0.528 * 0.9789||+||0.404 * 1.3336||+||0.892 * 1.0088||+||0.115 * 0.999|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9413||+||4.679 * -0.0601||-||0.327 * 1.0445|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $3.1 Mil.|
Revenue was 95.973 + 94.68 + 93.452 + 93.081 = $377.2 Mil.
Gross Profit was 64.079 + 65.707 + 63.004 + 63.024 = $255.8 Mil.
Total Current Assets was $227.7 Mil.
Total Assets was $2,179.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,909.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $104.2 Mil.
Selling, General & Admin. Expense(SGA) was $13.8 Mil.
Total Current Liabilities was $74.2 Mil.
Long-Term Debt was $250.0 Mil.
Net Income was 28.544 + 29.001 + 40.19 + 26.293 = $124.0 Mil.
Non Operating Income was 0 + 0 + 15.748 + 0 = $15.7 Mil.
Cash Flow from Operations was 55.473 + 59.457 + 67.17 + 57.182 = $239.3 Mil.
|Accounts Receivable was $5.9 Mil.
Revenue was 92.462 + 91.486 + 95.791 + 94.151 = $373.9 Mil.
Gross Profit was 60.716 + 62.196 + 62.689 + 62.616 = $248.2 Mil.
Total Current Assets was $220.9 Mil.
Total Assets was $2,237.4 Mil.
Property, Plant and Equipment(Net PPE) was $1,983.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $108.1 Mil.
Selling, General & Admin. Expense(SGA) was $14.6 Mil.
Total Current Liabilities was $68.6 Mil.
Long-Term Debt was $250.0 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)|
|=||(3.055 / 377.186)||/||(5.856 / 373.89)|
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)|
|=||(248.217 / 373.89)||/||(255.814 / 377.186)|
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 - (227.683 + 1909.263) / 2179.487)||/||(1 - (220.918 + 1983.707) / 2237.372)|
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))|
|=||(108.149 / (108.149 + 1983.707))||/||(104.202 / (104.202 + 1909.263))|
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)|
|=||(13.818 / 377.186)||/||(14.551 / 373.89)|
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)|
|=||((250 + 74.194) / 2179.487)||/||((250 + 68.612) / 2237.372)|
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|
|=||(124.028 - 15.748||-||239.282)||/||2179.487|
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.
PS Business Parks Inc has a M-score of -3.08 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
PS Business Parks Inc Annual Data
PS Business Parks Inc Quarterly Data