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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 13.63. The lowest was -4.24. And the median was -2.36.
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 * 0.5163||+||0.528 * 1.0285||+||0.404 * 0.2384||+||0.892 * 1.0473||+||0.115 * 0.984|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.4516||+||4.679 * -0.0656||-||0.327 * 0.9896|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $2.8 Mil.|
Revenue was 91.486 + 95.791 + 94.151 + 95.487 = $376.9 Mil.
Gross Profit was 62.196 + 62.689 + 62.616 + 62.043 = $249.5 Mil.
Total Current Assets was $181.4 Mil.
Total Assets was $2,227.1 Mil.
Property, Plant and Equipment(Net PPE) was $2,007.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $110.4 Mil.
Selling, General & Admin. Expense(SGA) was $13.6 Mil.
Total Current Liabilities was $68.9 Mil.
Long-Term Debt was $250.0 Mil.
Net Income was 97.472 + 26.42 + 24.981 + 25.098 = $174.0 Mil.
Non Operating Income was 92.373 + 0 + 0 + 0 = $92.4 Mil.
Cash Flow from Operations was 48.813 + 62.448 + 61.182 + 55.328 = $227.8 Mil.
|Accounts Receivable was $5.2 Mil.
Revenue was 93.586 + 89.934 + 88.087 + 88.278 = $359.9 Mil.
Gross Profit was 66.76 + 60.033 + 59.367 + 58.894 = $245.1 Mil.
Total Current Assets was $62.6 Mil.
Total Assets was $2,238.6 Mil.
Property, Plant and Equipment(Net PPE) was $2,015.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $108.9 Mil.
Selling, General & Admin. Expense(SGA) was $5.3 Mil.
Total Current Liabilities was $73.9 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)|
|=||(2.838 / 376.915)||/||(5.248 / 359.885)|
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)|
|=||(62.689 / 359.885)||/||(62.196 / 376.915)|
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 - (181.355 + 2007.713) / 2227.114)||/||(1 - (62.632 + 2015.517) / 2238.559)|
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))|
|=||(108.917 / (108.917 + 2015.517))||/||(110.357 / (110.357 + 2007.713))|
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)|
|=||(13.639 / 376.915)||/||(5.312 / 359.885)|
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 + 68.905) / 2227.114)||/||((250 + 73.919) / 2238.559)|
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|
|=||(173.971 - 92.373||-||227.771)||/||2227.114|
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 -3.73 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