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The zones of discrimination for M-Score is as such:
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Good Sign:
Beneish M-Score -2.42 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
The historical rank and industry rank for Ares Management's Beneish M-Score or its related term are showing as below:
During the past 13 years, the highest Beneish M-Score of Ares Management was -0.61. The lowest was -2.82. And the median was -1.77.
The historical data trend for Ares Management's Beneish M-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Ares Management Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Beneish M-Score | Get a 7-Day Free Trial | -1.48 | -1.83 | -1.03 | -2.10 | -2.22 |
Ares Management Quarterly Data | ||||||||||||||||||||
Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | |
Beneish M-Score | Get a 7-Day Free Trial | -2.31 | -2.22 | -2.30 | -2.32 | -2.42 |
For the Asset Management subindustry, Ares Management's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Asset Management industry and Financial Services sector, Ares Management's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Ares Management's Beneish M-Score falls into.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Ares Management 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 * 1.13 | + | 0.528 * 1.0296 | + | 0.404 * 0.9677 | + | 0.892 * 1.0827 | + | 0.115 * 1 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 0.7772 | + | 4.679 * -0.03872 | - | 0.327 * 0.9675 | |||||||
= | -2.42 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
This Year (Sep24) TTM: | Last Year (Sep23) TTM: |
Total Receivables was $1,047 Mil. Revenue was 1431.73 + 1137.92 + 1014.961 + 1490.859 = $5,075 Mil. Gross Profit was 995.854 + 718.062 + 602.01 + 1099.994 = $3,416 Mil. Total Current Assets was $2,713 Mil. Total Assets was $24,523 Mil. Property, Plant and Equipment(Net PPE) was $426 Mil. Depreciation, Depletion and Amortization(DDA) was $0 Mil. Selling, General, & Admin. Expense(SGA) was $1,042 Mil. Total Current Liabilities was $4,094 Mil. Long-Term Debt & Capital Lease Obligation was $14,148 Mil. Net Income was 118.46 + 94.938 + 73.027 + 173.95 = $460 Mil. Non Operating Income was -18.805 + -0.938 + 0.27 + 5.887 = $-14 Mil. Cash Flow from Operations was 841.319 + 432.172 + 710.045 + -560.052 = $1,423 Mil. |
Total Receivables was $856 Mil. Revenue was 1009.428 + 1434.337 + 1052.354 + 1191.83 = $4,688 Mil. Gross Profit was 641.926 + 1066.787 + 691.573 + 848.271 = $3,249 Mil. Total Current Assets was $2,053 Mil. Total Assets was $23,384 Mil. Property, Plant and Equipment(Net PPE) was $260 Mil. Depreciation, Depletion and Amortization(DDA) was $0 Mil. Selling, General, & Admin. Expense(SGA) was $1,238 Mil. Total Current Liabilities was $3,770 Mil. Long-Term Debt & Capital Lease Obligation was $14,209 Mil. |
1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
= | (1047.254 / 5075.47) | / | (856.037 / 4687.949) | |
= | 0.206336 | / | 0.182604 | |
= | 1.13 |
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) | |
= | (3248.557 / 4687.949) | / | (3415.92 / 5075.47) | |
= | 0.692959 | / | 0.673025 | |
= | 1.0296 |
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 Property, Plant and Equipment to Total Assets.
AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
= | (1 - (2713.306 + 426.483) / 24522.65) | / | (1 - (2053.182 + 259.537) / 23383.893) | |
= | 0.871964 | / | 0.901098 | |
= | 0.9677 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 | |
= | 5075.47 | / | 4687.949 | |
= | 1.0827 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
= | (0 / (0 + 259.537)) | / | (0 / (0 + 426.483)) | |
= | 0 | / | 0 | |
= | 1 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
= | (1041.897 / 5075.47) | / | (1238.156 / 4687.949) | |
= | 0.205281 | / | 0.264115 | |
= | 0.7772 |
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 in leverage
LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
= | ((14148.305 + 4093.776) / 24522.65) | / | ((14208.779 + 3769.88) / 23383.893) | |
= | 0.743887 | / | 0.768848 | |
= | 0.9675 |
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 | |
= | (460.375 - -13.586 | - | 1423.484) | / | 24522.65 | |
= | -0.03872 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Ares Management has a M-score of -2.42 suggests that the company is unlikely to be a manipulator.
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Michael J Arougheti | director, officer: Co-Founder & President | 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067 |
Bennett Rosenthal | director, officer: Co-Founder & Senior Partner | 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067 |
David B Kaplan | director, officer: Co-Founder & Senior Partner | 1999 AVENUE OF THE STARS, SUITE 1900, LOS ANGELES CA 90067 |
Ryan Berry | officer: Ptr, Chief Mktg. & Strat. Off. | C/O ARES MANAGEMENT LLC, 2000 AVENUE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067 |
R. Kipp Deveer | officer: Partner | 245 PARK AVENUE, 44TH FLOOR, NEW YORK NY 10167 |
Judy D. Olian | director | 2000 AVENUE OF THE STARS 12TH FL, LOS ANGELES CA 90067 |
Antony P Ressler | director, officer: Chairman, CEO, Co-Founder | 1999 AVENUE OF THE STARS, SUITE 1900, LOS ANGELES CA 90067 |
Ashish Bhutani | director | |
Aghili Naseem Sagati | officer: General Counsel | 2000 AVENUE OF THE STARS, LOS ANGELES CA 90067 |
Bush Antoinette Cook | director | NORTHPOINT TECHNOLOGY, 444 N CAPITOL STREET NW STE 645, WASHINGTON DC 20001 |
Eileen Naughton | director | C/O GOOGLE INC., 76 NINTH AVENUE, 4TH FLOOR, NEW YORK NY 10011 |
Ares Management Corp | officer: Chief Financial Officer | 2000 AVE OF THE STARS, 12TH FLOOR, LOS ANGELES CA 90067 |
Jarrod Phillips | officer: Chief Financial Officer | C/O ARES MANAGEMENT LLC, 245 PARK AVENUE, 42ND FLOOR, NEW YORK NY 100167 |
Michael R Mcferran | officer: EVP, CFO & Treasurer | 555 CALIFORNIA STREET, 50TH FLOOR, SAN FRANCISCO CA 94104 |
Michael D Weiner | officer: EVP, CLO & Secretary | 10250 CONSTELLATION BLVD, SUITE 2900, LOS ANGELES CA 90067-6229 |
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