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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 -2.79.
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 * 1.0822||+||0.528 * 0.9978||+||0.404 * 0.2305||+||0.892 * 0.9775||+||0.115 * 1.0306|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.2273||+||4.679 * -0.0658||-||0.327 * 0.9907|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $3.8 Mil.|
Revenue was 93.452 + 93.081 + 92.462 + 91.486 = $370.5 Mil.
Gross Profit was 63.004 + 63.024 + 60.716 + 62.196 = $248.9 Mil.
Total Current Assets was $284.1 Mil.
Total Assets was $2,264.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,943.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $106.1 Mil.
Selling, General & Admin. Expense(SGA) was $14.9 Mil.
Total Current Liabilities was $80.7 Mil.
Long-Term Debt was $250.0 Mil.
Net Income was 40.19 + 26.293 + 34.991 + 97.472 = $198.9 Mil.
Non Operating Income was 15.748 + 0 + 12.487 + 92.373 = $120.6 Mil.
Cash Flow from Operations was 67.17 + 57.182 + 54.263 + 48.813 = $227.4 Mil.
|Accounts Receivable was $3.6 Mil.
Revenue was 95.791 + 94.151 + 95.487 + 93.586 = $379.0 Mil.
Gross Profit was 62.689 + 62.616 + 62.043 + 66.76 = $254.1 Mil.
Total Current Assets was $89.2 Mil.
Total Assets was $2,242.0 Mil.
Property, Plant and Equipment(Net PPE) was $1,992.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $112.3 Mil.
Selling, General & Admin. Expense(SGA) was $6.8 Mil.
Total Current Liabilities was $80.5 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)|
|=||(3.788 / 370.481)||/||(3.581 / 379.015)|
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)|
|=||(63.024 / 379.015)||/||(63.004 / 370.481)|
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 - (284.077 + 1943.227) / 2264.537)||/||(1 - (89.152 + 1992.928) / 2242.01)|
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))|
|=||(112.277 / (112.277 + 1992.928))||/||(106.053 / (106.053 + 1943.227))|
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)|
|=||(14.883 / 370.481)||/||(6.836 / 379.015)|
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 + 80.662) / 2264.537)||/||((250 + 80.454) / 2242.01)|
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|
|=||(198.946 - 120.608||-||227.428)||/||2264.537|
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 -3.25 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