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# Essex Property Trust Beneish M-Score

: -2.69 (As of Today)
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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.

Essex Property Trust has a M-score of -2.69 suggests that the company is not a manipulator.

NYSE:ESS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.7   Max: 10.47
Current: -2.69

-3.7
10.47

During the past 13 years, the highest Beneish M-Score of Essex Property Trust was 10.47. The lowest was -3.70. And the median was -2.53.

## Essex Property Trust Beneish M-Score Historical Data

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

* Premium members only.

 Essex Property Trust Annual Data Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Beneish M-Score -2.04 -2.44 -2.61 -2.63 -2.73

Competitive Comparison
* 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.

Essex Property Trust Beneish M-Score Distribution

* The bar in red indicates where Essex Property Trust's Beneish M-Score falls into.

## Essex Property Trust 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 Essex Property Trust 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 * 0.9986 + 0.404 * 1.0044 + 0.892 * 1.0264 + 0.115 * 1.1583 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 1.1532 + 4.679 * -0.0457 - 0.327 * 1.0309 = -2.69

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

 This Year (Jun19) TTM: Last Year (Jun18) TTM: Accounts Receivable was \$0 Mil. Revenue was 361.635 + 356.223 + 353.158 + 350.917 = \$1,422 Mil. Gross Profit was 257.976 + 249.754 + 246.959 + 245.381 = \$1,000 Mil. Total Current Assets was \$175 Mil. Total Assets was \$12,671 Mil. Property, Plant and Equipment(Net PPE) was \$76 Mil. Depreciation, Depletion and Amortization(DDA) was \$481 Mil. Selling, General, & Admin. Expense(SGA) was \$55 Mil. Total Current Liabilities was \$334 Mil. Long-Term Debt & Capital Lease Obligation was \$5,919 Mil. Net Income was 92.275 + 118.858 + 117.82 + 80.975 = \$410 Mil. Non Operating Income was 19.242 + 51.16 + 67.378 + 18.941 = \$157 Mil. Cash Flow from Operations was 174.074 + 255.759 + 145.417 + 257.616 = \$833 Mil. Accounts Receivable was \$0 Mil. Revenue was 348.723 + 347.255 + 345.064 + 344.369 = \$1,385 Mil. Gross Profit was 246.795 + 244.522 + 241.437 + 240.232 = \$973 Mil. Total Current Assets was \$302 Mil. Total Assets was \$12,556 Mil. Property, Plant and Equipment(Net PPE) was \$0 Mil. (DDA) was \$474 Mil. Selling, General, & Admin. Expense(SGA) was \$46 Mil. Total Current Liabilities was \$320 Mil. Long-Term Debt & Capital Lease Obligation was \$5,691 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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 / 1421.933) / (0 / 1385.411) = 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) = (972.986 / 1385.411) / (1000.07 / 1421.933) = 0.70230856 / 0.70331724 = 0.9986

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 - (174.92 + 76.205) / 12671.145) / (1 - (302.3 + 0) / 12555.654) = 0.98018135 / 0.9759232 = 1.0044

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 = 1421.933 / 1385.411 = 1.0264

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)) = (473.874 / (473.874 + 0)) / (481.482 / (481.482 + 76.205)) = 1 / 0.86335525 = 1.1583

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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) = (54.899 / 1421.933) / (46.385 / 1385.411) = 0.03860871 / 0.03348104 = 1.1532

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) = ((5919.477 + 334.348) / 12671.145) / ((5691.093 + 320.124) / 12555.654) = 0.49354853 / 0.47876574 = 1.0309

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 = (409.928 - 156.721 - 832.866) / 12671.145 = -0.0457

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.

Essex Property Trust has a M-score of -2.69 suggests that the company will not be a manipulator.

## Essex Property Trust Beneish M-Score Headlines

From the Internet

###### Why Is Essex Property Trust (ESS) Up 7.5% Since Last Earnings Report?

- Zacks 2019-08-23 08:31:28

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