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Beneish M-Score 1.12 higher than -2.22, which implies that it might have manipulated its financial results.
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.
PS Business Parks Inc has a M-score of 1.12 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of PS Business Parks Inc was 2.26. The lowest was -4.24. And the median was -2.78.
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 * 0.8793||+||0.528 * 0.9947||+||0.404 * 10.4058||+||0.892 * 1.0573||+||0.115 * 0.9445|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6716||+||4.679 * -0.0566||-||0.327 * 0.7523|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $4.5 Mil.|
Revenue was 94.151 + 95.487 + 93.586 + 89.934 = $373.2 Mil.
Gross Profit was 62.616 + 62.043 + 66.76 + 60.033 = $251.5 Mil.
Total Current Assets was $94.5 Mil.
Total Assets was $2,231.5 Mil.
Property, Plant and Equipment(Net PPE) was $2,007.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $112.1 Mil.
Selling, General & Admin. Expense(SGA) was $6.4 Mil.
Total Current Liabilities was $69.8 Mil.
Long-Term Debt was $250.0 Mil.
Net Income was 24.981 + 25.098 + 32.755 + 24.151 = $107.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 61.182 + 55.328 + 56.489 + 60.196 = $233.2 Mil.
|Accounts Receivable was $4.8 Mil.
Revenue was 88.087 + 88.278 + 89.384 + 87.179 = $352.9 Mil.
Gross Profit was 59.367 + 58.894 + 60.402 + 57.885 = $236.5 Mil.
Total Current Assets was $49.8 Mil.
Total Assets was $2,126.3 Mil.
Property, Plant and Equipment(Net PPE) was $2,064.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $108.5 Mil.
Selling, General & Admin. Expense(SGA) was $9.0 Mil.
Total Current Liabilities was $65.1 Mil.
Long-Term Debt was $340.0 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)|
|=||(4.468 / 373.158)||/||(4.806 / 352.928)|
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)|
|=||(62.043 / 352.928)||/||(62.616 / 373.158)|
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 - (94.466 + 2007.066) / 2231.476)||/||(1 - (49.762 + 2064.619) / 2126.28)|
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))|
|=||(108.546 / (108.546 + 2064.619))||/||(112.063 / (112.063 + 2007.066))|
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)|
|=||(6.393 / 373.158)||/||(9.003 / 352.928)|
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 + 69.813) / 2231.476)||/||((340 + 65.095) / 2126.28)|
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|
|=||(106.985 - 0||-||233.195)||/||2231.476|
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 1.12 signals that the company is likely to 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