Brookfield (TSX:BN) Beneish M-Score : -2.41 (As of May. 02, 2024)

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What is Brookfield Beneish M-Score?

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 -2.41 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

TSX:BN' s Beneish M-Score Range Over the Past 10 Years
Min: -2.59 Med: -2.34 Max: -2.03
Current: -2.41

During the past 13 years, the highest Beneish M-Score of Brookfield was -2.03. The lowest was -2.59. And the median was -2.34.

Brookfield Beneish M-Score Historical Data

The historical data trend for Brookfield'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.

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Brookfield Beneish M-Score Chart

Brookfield Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.48

-2.41

-2.54

-2.26

-2.41

Brookfield 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															-2.26	-2.36	-2.39	-2.36	-2.41

Competitive Comparison of Brookfield's Beneish M-Score

For the Asset Management subindustry, Brookfield'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.

Brookfield's Beneish M-Score Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Brookfield's Beneish M-Score distribution charts can be found below:

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

Brookfield 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 Brookfield 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 * 0.9658

0.528 * 1.0176

0.404 * 1.0102

0.892 * 1.0631

0.115 * 0.9681

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.1564

4.679 * -0.02563

0.327 * 0.9682

-2.41

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was C$27,185 Mil.
Revenue was 32893.349 + 33071.117 + 31445.305 + 31877.285 = C$129,287 Mil.
Gross Profit was 5263.097 + 4536.944 + 4998.193 + 4757.579 = C$19,556 Mil.
Total Current Assets was C$62,658 Mil.
Total Assets was C$657,511 Mil.
Property, Plant and Equipment(Net PPE) was C$198,043 Mil.
Depreciation, Depletion and Amortization(DDA) was C$12,230 Mil.
Selling, General, & Admin. Expense(SGA) was C$19 Mil.
Total Current Liabilities was C$122,265 Mil.
Long-Term Debt & Capital Lease Obligation was C$236,266 Mil.
Net Income was 937.778 + 311.213 + 107.617 + 164.196 = C$1,521 Mil.
Non Operating Income was 4506.434 + 1380.162 + 2585.456 + 1160.318 = C$9,632 Mil.
Cash Flow from Operations was 2020.45 + 4650.605 + 539.412 + 1529.759 = C$8,740 Mil.

Total Receivables was C$26,476 Mil.
Revenue was 32893.36 + 31237.27 + 29776.982 + 27702.612 = C$121,610 Mil.
Gross Profit was 5442.151 + 4868.735 + 4372.566 + 4034.742 = C$18,718 Mil.
Total Current Assets was C$72,528 Mil.
Total Assets was C$599,484 Mil.
Property, Plant and Equipment(Net PPE) was C$168,818 Mil.
Depreciation, Depletion and Amortization(DDA) was C$10,073 Mil.
Selling, General, & Admin. Expense(SGA) was C$115 Mil.
Total Current Liabilities was C$105,619 Mil.
Long-Term Debt & Capital Lease Obligation was C$232,001 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)
	=	(27184.841 / 129287.056)	/	(26475.806 / 121610.224)
	=	0.210267	/	0.21771
	=	0.9658

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)
	=	(18718.194 / 121610.224)	/	(19555.813 / 129287.056)
	=	0.15392	/	0.151259
	=	1.0176

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 - (62658.086 + 198042.967) / 657511.452)	/	(1 - (72527.598 + 168818.078) / 599484.314)
	=	0.603503	/	0.597411
	=	1.0102

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
	=	129287.056	/	121610.224
	=	1.0631

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))
	=	(10073.414 / (10073.414 + 168818.078))	/	(12230.486 / (12230.486 + 198042.967))
	=	0.05631	/	0.058165
	=	0.9681

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)
	=	(19.156 / 129287.056)	/	(115.085 / 121610.224)
	=	0.000148	/	0.000946
	=	0.1564

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)
	=	((236266.493 + 122265.374) / 657511.452)	/	((232000.554 + 105619.299) / 599484.314)
	=	0.545286	/	0.563184
	=	0.9682

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
	=	(1520.804 - 9632.37	-	8740.226)	/	657511.452
	=	-0.02563

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.

Brookfield has a M-score of -2.41 suggests that the company is unlikely to be a manipulator.

Brookfield Beneish M-Score Related Terms

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Brookfield (TSX:BN) Business Description

Industry

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Address

181 Bay Street, Suite 100, Brookfield Place, P.O. Box 762, Toronto, ON, CAN, M5J 2T3

Website

https://www.brookfield.com

Brookfield Corp owns and manages the commercial property, power, and infrastructure assets. Its investment focus includes Real Estate, Infrastructure, Renewable Power and Private Equity. Real Estate is made up of office and retail properties; Renewable power is made up of hydroelectric, wind, solar, and storage generating facilities; Infrastructure is made up of utilities, transport, energy, data infrastructure, and sustainable resource assets; and Private Equity is focused on business services, infrastructure services, and industrial operations. The company generates the majority revenue through Private Equity. Located around the world, its assets are concentrated in the United States, and Canada.