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GuruFocus has detected 4 Warning Signs with CBRE Group Inc $CBG.
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CBRE Group Inc (NYSE:CBG)
Beneish M-Score
-2.36 (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.

CBRE Group Inc has a M-score of -2.36 suggests that the company is not a manipulator.

CBG' s Beneish M-Score Range Over the Past 10 Years
Min: -4   Max: -1.43
Current: -2.36

-4
-1.43

During the past 13 years, the highest Beneish M-Score of CBRE Group Inc was -1.43. The lowest was -4.00. And the median was -2.42.


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 CBRE Group 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 * 0.9094+0.528 * 1.087+0.404 * 0.9737+0.892 * 1.1336+0.115 * 0.9538
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8818+4.679 * 0.0022-0.327 * 0.9424
=-2.36

* 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 $3,240 Mil.
Revenue was 2981.204 + 3823.831 + 3193.487 + 3207.537 = $13,206 Mil.
Gross Profit was 894.125 + 1220.733 + 940.704 + 953.304 = $4,009 Mil.
Total Current Assets was $4,245 Mil.
Total Assets was $9,927 Mil.
Property, Plant and Equipment(Net PPE) was $552 Mil.
Depreciation, Depletion and Amortization(DDA) was $374 Mil.
Selling, General & Admin. Expense(SGA) was $2,744 Mil.
Total Current Liabilities was $3,473 Mil.
Long-Term Debt was $2,549 Mil.
Net Income was 129.597 + 263.975 + 104.163 + 121.668 = $619 Mil.
Non Operating Income was 19.133 + 76.684 + 26.028 + 38.811 = $161 Mil.
Cash Flow from Operations was -342.03 + 503.504 + 156.828 + 118.623 = $437 Mil.
Accounts Receivable was $3,143 Mil.
Revenue was 2846.734 + 3700.242 + 2712.559 + 2390.506 = $11,650 Mil.
Gross Profit was 833.121 + 1169.721 + 938.899 + 902.532 = $3,844 Mil.
Total Current Assets was $4,087 Mil.
Total Assets was $9,835 Mil.
Property, Plant and Equipment(Net PPE) was $528 Mil.
Depreciation, Depletion and Amortization(DDA) was $331 Mil.
Selling, General & Admin. Expense(SGA) was $2,745 Mil.
Total Current Liabilities was $3,696 Mil.
Long-Term Debt was $2,635 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)
=(3239.686 / 13206.059) / (3142.636 / 11650.041)
=0.24531815 / 0.26975321
=0.9094

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)
=(3844.273 / 11650.041) / (4008.866 / 13206.059)
=0.32997935 / 0.30356263
=1.087

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 - (4245.46 + 551.633) / 9927.112) / (1 - (4086.896 + 528.35) / 9835.135)
=0.51676852 / 0.53073893
=0.9737

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
=13206.059 / 11650.041
=1.1336

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))
=(331.244 / (331.244 + 528.35)) / (373.97 / (373.97 + 551.633))
=0.38534936 / 0.40402851
=0.9538

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)
=(2744.175 / 13206.059) / (2745.2 / 11650.041)
=0.20779666 / 0.23563866
=0.8818

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)
=((2549.258 + 3473.18) / 9927.112) / ((2635.045 + 3696.42) / 9835.135)
=0.60666566 / 0.64375985
=0.9424

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
=(619.403 - 160.656 - 436.925) / 9927.112
=0.0022

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.

CBRE Group Inc has a M-score of -2.36 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.

CBRE Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.82061.17490.88440.98681.04611.00831.06720.92732.06380.7588
GMI 1.01491.09371.04110.97881.01620.97441.02051.09721.09331.1507
AQI 1.01840.93750.93461.01380.89560.91681.22070.93440.96261.0051
SGI 1.49660.850.81221.22791.15451.10311.1031.25961.19951.2041
DEPI 0.90791.08770.92660.97491.29240.91261.05560.84710.93350.941
SGAI 1.01921.03360.9750.94631.01440.96450.95250.92020.90020.8771
LVGI 0.96711.30680.90220.93660.98570.96360.90480.97951.10760.9464
TATA -0.0438-0.168-0.024-0.0829-0.0318-0.0061-0.0643-0.0354-0.0237-0.0075
M-score -2.39-3.31-2.84-2.66-2.45-2.45-2.48-2.45-1.43-2.44

CBRE Group Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.92731.53281.22890.84332.06380.94131.05031.39410.75880.9094
GMI 1.09721.07431.05471.05291.09331.1481.20931.23111.15071.087
AQI 0.93440.87710.98941.10630.96261.13941.06420.90391.00510.9737
SGI 1.25961.22071.19481.17021.19951.26061.31161.30231.20411.1336
DEPI 0.84710.88840.91930.97680.93350.9340.91750.90120.9410.9538
SGAI 0.92020.92490.93320.91970.90020.89160.86340.87880.87710.8818
LVGI 0.97950.99720.9211.04071.10761.04291.10591.01270.94640.9424
TATA -0.0415-0.049-0.0522-0.0242-0.0237-0.0173-0.0189-0.0202-0.00750.0022
M-score -2.48-2.03-2.29-2.52-1.43-2.25-2.13-1.85-2.44-2.36
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