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GuruFocus has detected 8 Warning Signs with Apartment Investment & Management Co $AIV.
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Apartment Investment & Management Co (NYSE:AIV)
Beneish M-Score
-2.37 (As of Today)

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.

Apartment Investment & Management Co has a M-score of -2.37 suggests that the company is not a manipulator.

AIV' s Beneish M-Score Range Over the Past 10 Years
Min: -35.87   Max: -1.73
Current: -2.37

-35.87
-1.73

During the past 13 years, the highest Beneish M-Score of Apartment Investment & Management Co was -1.73. The lowest was -35.87. And the median was -2.70.


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 Apartment Investment & Management Co 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+0.528 * 0.9911+0.404 * 1.1634+0.892 * 1.013+0.115 * 0.9174
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9699+4.679 * 0.0064-0.327 * 0.9763
=-2.37

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $0.0 Mil.
Revenue was 246.481 + 249.493 + 248.904 + 251.218 = $996.1 Mil.
Gross Profit was 157.377 + 163.888 + 156.443 + 161.896 = $639.6 Mil.
Total Current Assets was $138.6 Mil.
Total Assets was $6,187.4 Mil.
Property, Plant and Equipment(Net PPE) was $5,509.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $340.4 Mil.
Selling, General & Admin. Expense(SGA) was $43.7 Mil.
Total Current Liabilities was $278.4 Mil.
Long-Term Debt was $3,971.0 Mil.
Net Income was 13.698 + 164.407 + 15.513 + 224.433 = $418.1 Mil.
Non Operating Income was 0.465 + 0.53 + 0.558 + 4.906 = $6.5 Mil.
Cash Flow from Operations was 68.516 + 101.268 + 99.691 + 102.812 = $372.3 Mil.
Accounts Receivable was $0.0 Mil.
Revenue was 246.239 + 245.875 + 246.387 + 244.783 = $983.3 Mil.
Gross Profit was 156.867 + 157.264 + 155.861 + 155.767 = $625.8 Mil.
Total Current Assets was $154.6 Mil.
Total Assets was $6,142.2 Mil.
Property, Plant and Equipment(Net PPE) was $5,527.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $311.7 Mil.
Selling, General & Admin. Expense(SGA) was $44.5 Mil.
Total Current Liabilities was $403.4 Mil.
Long-Term Debt was $3,917.6 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)
=(0 / 996.096) / (0 / 983.284)
=0 / 0
=1

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)
=(625.759 / 983.284) / (639.604 / 996.096)
=0.63639701 / 0.6421108
=0.9911

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 - (138.623 + 5509.622) / 6187.44) / (1 - (154.612 + 5527.521) / 6142.213)
=0.08714347 / 0.0749046
=1.1634

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
=996.096 / 983.284
=1.013

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))
=(311.697 / (311.697 + 5527.521)) / (340.406 / (340.406 + 5509.622))
=0.05337992 / 0.05818878
=0.9174

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)
=(43.684 / 996.096) / (44.461 / 983.284)
=0.04385521 / 0.04521684
=0.9699

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)
=((3971.036 + 278.421) / 6187.44) / ((3917.59 + 403.357) / 6142.213)
=0.68678759 / 0.70348374
=0.9763

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
=(418.051 - 6.459 - 372.287) / 6187.44
=0.0064

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.

Apartment Investment & Management Co has a M-score of -2.37 suggests that the company will not 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 local exchange's currency.

Apartment Investment & Management Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.10410.96790.74530.97810.869101111
GMI 11.81361.02250.98070.95460.9660.97770.99480.97640.9782
AQI 1.72310.6910.57941.14131.19821.0420.56830.9940.89290.7529
SGI 0.90480.87690.88860.8520.96461.03691.00111.01060.99691.0148
DEPI 1.10630.72180.98121.03741.00361.00881.27461.0460.93550.9595
SGAI 1.11181.24720.64281.10610.98880.93970.91970.95530.98231.0255
LVGI 0.011103.23761.03431.01451.07140.98270.98370.93750.93690.9624
TATA -0.0424-0.0109-0.0363-0.0428-0.0438-0.0315-0.0199-0.0242-0.01820.0075
M-score -2.06-35.87-3.09-2.80-2.80-3.50-2.71-2.56-2.61-2.54

Apartment Investment & Management Co Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1111111111
GMI 0.99480.99090.98510.97390.97640.96580.97210.9830.97820.9911
AQI 0.9940.89690.8120.92090.89290.98740.79280.75390.75291.1634
SGI 1.01060.99410.98780.98450.99691.00371.01191.0151.01481.013
DEPI 1.0461.01951.03181.00740.93550.93080.90580.94980.95950.9174
SGAI 0.95531.00131.07711.09680.98231.00190.93460.93111.02550.9699
LVGI 0.93750.86980.90260.95180.93691.02020.9840.98750.96240.9763
TATA -0.0242-0.0103-0.0022-0.0206-0.0182-0.0303-0.0064-0.00760.00750.0064
M-score -2.56-2.54-2.56-2.64-2.61-2.66-2.59-2.60-2.54-2.37
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