Ares Management (Ares Management) Beneish M-Score : -2.22 (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 -2.22 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:

ARESpA.PFD' s Beneish M-Score Range Over the Past 10 Years
Min: -2.82 Med: -1.78 Max: -1.03
Current: -2.22

During the past 13 years, the highest Beneish M-Score of Ares Management was -1.03. The lowest was -2.82. And the median was -1.78.

Ares Management Beneish M-Score Historical Data

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.

* Premium members only.

Ares Management Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-1.48

-1.83

-1.03

-2.10

-2.22

Ares Management 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	Get a 7-Day Free Trial															-2.10	-1.88	-2.26	-2.31	-2.22

Competitive Comparison

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.

Ares Management Beneish M-Score Distribution

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.

Ares Management 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 Ares Management 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 * 0.8777

0.528 * 0.8509

0.404 * 0.9816

0.892 * 1.3372

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.783

4.679 * 0.028417

0.327 * 1.0417

-2.22

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $1,273.18 Mil.
Revenue was 1490.859 + 1009.428 + 1434.337 + 1052.354 = $4,986.98 Mil.
Gross Profit was 1099.994 + 641.926 + 1066.787 + 691.573 = $3,500.28 Mil.
Total Current Assets was $2,770.96 Mil.
Total Assets was $24,730.50 Mil.
Property, Plant and Equipment(Net PPE) was $371.55 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $1,267.67 Mil.
Total Current Liabilities was $3,791.18 Mil.
Long-Term Debt & Capital Lease Obligation was $15,630.71 Mil.
Net Income was 173.95 + 61.823 + 144.514 + 94.039 = $474.33 Mil.
Non Operating Income was 5.887 + 5.742 + -5.887 + -0.923 = $4.82 Mil.
Cash Flow from Operations was -560.052 + 318.271 + -699.052 + 707.572 = $-233.26 Mil.

Total Receivables was $1,084.78 Mil.
Revenue was 1191.83 + 966.192 + 710.599 + 860.868 = $3,729.49 Mil.
Gross Profit was 848.271 + 540.773 + 334.824 + 503.625 = $2,227.49 Mil.
Total Current Assets was $2,199.41 Mil.
Total Assets was $22,002.84 Mil.
Property, Plant and Equipment(Net PPE) was $235.63 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $1,210.68 Mil.
Total Current Liabilities was $3,421.49 Mil.
Long-Term Debt & Capital Lease Obligation was $13,166.19 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)
	=	(1273.176 / 4986.978)	/	(1084.784 / 3729.489)
	=	0.2553	/	0.290867
	=	0.8777

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)
	=	(2227.493 / 3729.489)	/	(3500.28 / 4986.978)
	=	0.597265	/	0.701884
	=	0.8509

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 - (2770.961 + 371.549) / 24730.5)	/	(1 - (2199.412 + 235.628) / 22002.839)
	=	0.87293	/	0.889331
	=	0.9816

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
	=	4986.978	/	3729.489
	=	1.3372

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 + 235.628))	/	(0 / (0 + 371.549))
	=	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)
	=	(1267.668 / 4986.978)	/	(1210.679 / 3729.489)
	=	0.254196	/	0.324623
	=	0.783

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)
	=	((15630.709 + 3791.183) / 24730.5)	/	((13166.19 + 3421.49) / 22002.839)
	=	0.785342	/	0.753888
	=	1.0417

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
	=	(474.326 - 4.819	-	-233.261)	/	24730.5
	=	0.028417

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 -2.22 suggests that the company is unlikely to be a manipulator.

Ares Management Beneish M-Score Related Terms

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Ares Management (Ares Management) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Ares Management Corp (NYSE:ARESpA.PFD) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

ARES:USA 0QN:Germany

Address

2000 Avenue of the Stars, 12th Floor, Los Angeles, CA, USA, 90067

Website

https://www.aresmgmt.com

Ares Management Corp is an asset management company based in the United States. It offers investors investment-related advice and strategies for capital growth. The company's operating segments include Credit Group, Private Equity Group, Real Estate Group, Secondaries Group, and Strategic Initiatives. Its Credit Group generates maximum revenue, and manages credit strategies across the liquid and illiquid spectrum. Private Equity Group manages investment strategies categorized as corporate private equity, infrastructure and power, and special opportunities, Real Estate Group is engaged in managing real estate equity and debt strategies. The Secondary Solutions Group invests in secondary markets across a range of asset class including private equity, real estate, and infrastructure.