Innovative Industrial Properties (Innovative Industrial Properties) Beneish M-Score

: -2.44 (As of Today)

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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 -2.44 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Innovative Industrial Properties's Beneish M-Score or its related term are showing as below:

IIPRpA.PFD' s Beneish M-Score Range Over the Past 10 Years
Min: -2.44 Med: -2.02 Max: -0.88
Current: -2.44

During the past 8 years, the highest Beneish M-Score of Innovative Industrial Properties was -0.88. The lowest was -2.44. And the median was -2.02.

Innovative Industrial Properties Beneish M-Score Historical Data

The historical data trend for Innovative Industrial Properties'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.

* Premium members only.

Innovative Industrial Properties Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

-1.85

-0.88

-2.18

-2.27

-2.44

Innovative Industrial Properties Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score																-2.27	-2.43	-2.50	-2.44	-2.44

Competitive Comparison

For the REIT - Industrial subindustry, Innovative Industrial Properties'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.

Innovative Industrial Properties Beneish M-Score Distribution

For the REITs industry and Real Estate sector, Innovative Industrial Properties's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Innovative Industrial Properties's Beneish M-Score falls into.

Innovative Industrial Properties Beneish M-Score Calculation

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 Innovative Industrial Properties for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.09

0.528 * 1.0461

0.404 * 0.9747

0.892 * 1.1199

0.115 * 0.992

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9929

4.679 * -0.03763

0.327 * 0.9697

-2.44

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $22.00 Mil.
Revenue was 79.156 + 77.826 + 76.457 + 76.067 = $309.51 Mil.
Gross Profit was 71.963 + 71.508 + 70.698 + 70.444 = $284.61 Mil.
Total Current Assets was $163.70 Mil.
Total Assets was $2,391.09 Mil.
Property, Plant and Equipment(Net PPE) was $1.36 Mil.
Depreciation, Depletion and Amortization(DDA) was $67.19 Mil.
Selling, General, & Admin. Expense(SGA) was $42.83 Mil.
Total Current Liabilities was $132.18 Mil.
Long-Term Debt & Capital Lease Obligation was $300.88 Mil.
Net Income was 41.633 + 41.594 + 41.269 + 41.092 = $165.59 Mil.
Non Operating Income was 0 + 0 + 0 + 0.022 = $0.02 Mil.
Cash Flow from Operations was 66.081 + 63.082 + 61.764 + 64.616 = $255.54 Mil.

Total Receivables was $18.02 Mil.
Revenue was 70.461 + 70.883 + 70.511 + 64.504 = $276.36 Mil.
Gross Profit was 67.173 + 68.06 + 68.084 + 62.522 = $265.84 Mil.
Total Current Assets was $106.59 Mil.
Total Assets was $2,414.84 Mil.
Property, Plant and Equipment(Net PPE) was $1.74 Mil.
Depreciation, Depletion and Amortization(DDA) was $61.30 Mil.
Selling, General, & Admin. Expense(SGA) was $38.52 Mil.
Total Current Liabilities was $149.55 Mil.
Long-Term Debt & Capital Lease Obligation was $301.50 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)
	=	(22 / 309.506)	/	(18.021 / 276.359)
	=	0.071081	/	0.065209
	=	1.09

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)
	=	(265.839 / 276.359)	/	(284.613 / 309.506)
	=	0.961934	/	0.919572
	=	1.0461

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 - (163.699 + 1.355) / 2391.09)	/	(1 - (106.593 + 1.739) / 2414.836)
	=	0.930971	/	0.955139
	=	0.9747

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
	=	309.506	/	276.359
	=	1.1199

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))
	=	(61.303 / (61.303 + 1.739))	/	(67.194 / (67.194 + 1.355))
	=	0.972415	/	0.980233
	=	0.992

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)
	=	(42.832 / 309.506)	/	(38.52 / 276.359)
	=	0.138388	/	0.139384
	=	0.9929

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)
	=	((300.88 + 132.182) / 2391.09)	/	((301.495 + 149.547) / 2414.836)
	=	0.181115	/	0.18678
	=	0.9697

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
	=	(165.588 - 0.022	-	255.543)	/	2391.09
	=	-0.03763

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.

Innovative Industrial Properties has a M-score of -2.44 suggests that the company is unlikely to be a manipulator.

Innovative Industrial Properties Beneish M-Score Related Terms

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Innovative Industrial Properties (Innovative Industrial Properties) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Innovative Industrial Properties Inc (NYSE:IIPRpA.PFD) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

IIPR:USA 1IK:Germany

Address

1389 Center Drive, Suite 220, Park City, UT, USA, 84098

Website

https://www.innovativeindustrialproperties.com

Innovative Industrial Properties Inc is a real estate investment trust engaged in the acquisition, ownership, and management of specialized industrial properties leased to state-licensed operators for their regulated medical-use cannabis facilities. It conducts its business through a traditional umbrella partnership real estate investment trust, or UPREIT structure, in which properties are owned by Operating Partnership, directly or through subsidiaries. Its property portfolio is spread across the United States.