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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.
Rouse Properties Inc has a M-score of signals that the company is a manipulator.
During the past 5 years, the highest Beneish M-Score of Rouse Properties Inc was 0.00. The lowest was 0.00. And the median was 0.00.
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 Rouse Properties 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 *||+||0.528 *||+||0.404 *||+||0.892 *||+||0.115 *|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 *||+||4.679 *||-||0.327 *|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $30.4 Mil.|
Revenue was 67.352 + 60.315 + 58.381 + 59.879 = $245.9 Mil.
Gross Profit was 66.11 + 35.625 + 35.177 + 39.6 = $176.5 Mil.
Total Current Assets was $213.8 Mil.
Total Assets was $2,019.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,805.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $84.2 Mil.
Selling, General & Admin. Expense(SGA) was $25.7 Mil.
Total Current Liabilities was $1,564.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -24.691 + -4.683 + 4.116 + -29.486 = $-54.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 15.997 + 19.616 + 15.966 + 11.023 = $62.6 Mil.
|Accounts Receivable was $176.1 Mil.
Revenue was 59.822 + 56.289 + 54.422 + 56.408 = $226.9 Mil.
Gross Profit was 57.901 + 32.712 + 31.762 + 36.019 = $158.4 Mil.
Total Current Assets was $368.7 Mil.
Total Assets was $1,905.1 Mil.
Property, Plant and Equipment(Net PPE) was $1,536.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $95.2 Mil.
Selling, General & Admin. Expense(SGA) was $24.2 Mil.
Total Current Liabilities was $1,372.2 Mil.
Long-Term Debt was $0.0 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)|
|=||(30.444 / 245.927)||/||(176.139 / 226.941)|
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)|
|=||(35.625 / 226.941)||/||(66.11 / 245.927)|
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 - (213.811 + 1805.699) / 2019.51)||/||(1 - (368.654 + 1536.419) / 1905.073)|
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))|
|=||(95.243 / (95.243 + 1536.419))||/||(84.232 / (84.232 + 1805.699))|
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)|
|=||(25.732 / 245.927)||/||(24.215 / 226.941)|
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)|
|=||((0 + 1564.229) / 2019.51)||/||((0 + 1372.177) / 1905.073)|
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|
|=||(-54.744 - 0||-||62.602)||/||2019.51|
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.
Rouse Properties Inc has a M-score of 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
Rouse Properties Inc Annual Data
Rouse Properties Inc Quarterly Data