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PS Business Parks Inc (NYSE:PSB)
Beneish M-Score
1.12 (As of Today)

Warning Sign:

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.

PSB' s 10-Year Beneish M-Score Range
Min: -4.22   Max: 2.26
Current: 1.12

-4.22
2.26

During the past 13 years, the highest Beneish M-Score of PS Business Parks Inc was 2.26. The lowest was -4.22. And the median was -2.85.


Definition

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
=1.12

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

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

Measured as the ratio of days’ sales in receivables in year t to year t-1.

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)
=0.01197348 / 0.01361751
=0.8793

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(62.043 / 352.928) / (62.616 / 373.158)
=0.67024436 / 0.67384861
=0.9947

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

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)
=0.05823231 / 0.00559616
=10.4058

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=373.158 / 352.928
=1.0573

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))
=0.04994835 / 0.05288163
=0.9445

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)
=0.01713215 / 0.02550945
=0.6716

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)
=0.14331904 / 0.19051818
=0.7523

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(106.985 - 0 - 233.195) / 2231.476
=-0.0566

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.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

PS Business Parks Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.01071.20921.00050.91850.9442010.11771.27811.065
GMI 1.02961.00271.01311.00470.9981.01011.0121.01670.98980.9859
AQI 2.60343.57770.44370.72860.42670.90690.40952.2941.02990.3098
SGI 1.1721.00511.10291.1181.03810.96391.02741.06961.16311.0365
DEPI 0.79060.90630.99190.93230.95121.11751.26731.2190.7831.0368
SGAI 0.84321.25621.09341.0050.98540.79451.51470.87540.84860.5746
LVGI 0.04282.12232.58980.87412.80530.56431.92642.97950.68670.5792
TATA -0.0659-0.0502-0.0694-0.0761-0.0822-0.0655-0.0571-0.041-0.0558-0.0532
M-score -1.65-1.90-3.47-2.88-3.71-3.58-3.32-3.49-2.23-2.71

PS Business Parks Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.83631.51131.18851.27971.34630.81050.971.06515.37930.8793
GMI 1.00660.9961.00130.98970.99661.00070.99510.98580.99230.9947
AQI 0.86150.90610.81481.02990.28680.29650.37370.30982.900910.4058
SGI 1.08321.11481.12611.16161.13211.09511.0691.03641.04691.0573
DEPI 1.17281.11671.0840.7830.84270.90190.94381.03681.00970.9445
SGAI 1.06121.19331.36190.84970.82030.79030.77950.57470.57020.6716
LVGI 2.4051.93821.55860.68670.57640.68240.80550.57920.75230.7523
TATA -0.0495-0.0513-0.0489-0.0558-0.0539-0.0544-0.0575-0.0532-0.0534-0.0566
M-score -3.29-2.51-2.73-2.23-2.43-2.98-2.88-2.712.261.12
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