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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 -2.86.
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 * 0.4975||+||0.528 * 0.9783||+||0.404 * 1.1072||+||0.892 * 1.0201||+||0.115 * 1.0116|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0479||+||4.679 * -0.0665||-||0.327 * 0.4531|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $2.3 Mil.|
Revenue was 96.218 + 95.973 + 94.68 + 93.452 = $380.3 Mil.
Gross Profit was 66.468 + 64.079 + 65.707 + 63.004 = $259.3 Mil.
Total Current Assets was $35.5 Mil.
Total Assets was $1,982.1 Mil.
Property, Plant and Equipment(Net PPE) was $1,898.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $102.4 Mil.
Selling, General & Admin. Expense(SGA) was $15.7 Mil.
Total Current Liabilities was $74.3 Mil.
Long-Term Debt was $54.0 Mil.
Net Income was 29.68 + 28.544 + 29.001 + 40.19 = $127.4 Mil.
Non Operating Income was 0 + 0 + 0 + 15.748 = $15.7 Mil.
Cash Flow from Operations was 61.341 + 55.473 + 59.457 + 67.17 = $243.4 Mil.
|Accounts Receivable was $4.5 Mil.
Revenue was 93.081 + 92.462 + 91.486 + 95.791 = $372.8 Mil.
Gross Profit was 63.024 + 60.716 + 62.196 + 62.689 = $248.6 Mil.
Total Current Assets was $232.9 Mil.
Total Assets was $2,239.6 Mil.
Property, Plant and Equipment(Net PPE) was $1,957.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $106.9 Mil.
Selling, General & Admin. Expense(SGA) was $14.7 Mil.
Total Current Liabilities was $70.0 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)|
|=||(2.303 / 380.323)||/||(4.538 / 372.82)|
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)|
|=||(248.625 / 372.82)||/||(259.258 / 380.323)|
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 - (35.549 + 1898.473) / 1982.082)||/||(1 - (232.931 + 1957.64) / 2239.619)|
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))|
|=||(106.879 / (106.879 + 1957.64))||/||(102.391 / (102.391 + 1898.473))|
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)|
|=||(15.698 / 380.323)||/||(14.685 / 372.82)|
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)|
|=||((54 + 74.335) / 1982.082)||/||((250 + 70.014) / 2239.619)|
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|
|=||(127.415 - 15.748||-||243.441)||/||1982.082|
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 -3.03 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