Armour Beneish M Score

ARR
 Stock
  

USD 7.47  0.03  0.40%   

This module uses fundamental data of Armour Residential to approximate the value of its Beneish M Score. Armour Residential M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please continue to Armour Residential Piotroski F Score and Armour Residential Altman Z Score analysis.
  
Armour Residential Total Debt is relatively stable at the moment as compared to the past year. Armour Residential reported last year Total Debt of 3.95 Billion. As of 08/16/2022, Debt to Equity Ratio is likely to grow to 4.87, while Issuance Repayment of Debt Securities is likely to drop (603.5 M). Armour Residential Quick Ratio is relatively stable at the moment as compared to the past year. Armour Residential reported last year Quick Ratio of 0.05. As of 08/16/2022, Asset Turnover is likely to grow to 0.0108, while Calculated Tax Rate is likely to drop (0.0105) .
At this time, it appears that Armour Residential is an unlikely manipulator. The earnings manipulation may begin if Armour Residential's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Armour Residential executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Armour Residential's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.66
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.22Focus
Asset QualityN/AFocus
Expense Coverage0.75Focus
Gross Margin Strengs1.09Focus
Accruals Factor0.75Focus
Depreciation ResistanceN/AFocus
Net Sales Growth1.08Focus
Financial Leverage Condition1.08Focus

Armour Residential Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Armour Residential's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues54.2 M50.3 M
Significantly Up
Decreasing
Stable
Selling General and Administrative Expense5.3 M6.6 M
Significantly Down
Increasing
Slightly volatile
Net Cash Flow from Operations12 M11.7 M
Fairly Up
Decreasing
Slightly volatile
Total Assets7.4 B5.3 B
Significantly Up
Decreasing
Slightly volatile
Investments6.8 B4.7 B
Way Up
Decreasing
Slightly volatile
Trade and Non Trade Receivables307.5 M234.5 M
Significantly Up
Decreasing
Slightly volatile
Total Liabilities6.3 B4.1 B
Way Up
Decreasing
Slightly volatile
Current Assets710 M542.4 M
Significantly Up
Decreasing
Stable
Current Liabilities7.5 B6.6 B
Fairly Up
Decreasing
Stable
Total DebtB3.9 B
Way Up
Decreasing
Slightly volatile
Operating Income16.6 M15.4 M
Significantly Up
Decreasing
Stable
Gross Margin0.60.552
Significantly Up
Increasing
Slightly volatile

Armour Residential Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Armour Residential's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Armour Residential in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Armour Residential's degree of accounting gimmicks and manipulations.

About Armour Residential Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

11.8 Million

Armour Residential Operating Expenses is relatively stable at the moment as compared to the past year. Armour Residential reported last year Operating Expenses of 12.41 Million

About Armour Residential Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Armour Residential R's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Armour Residential using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Armour Residential R based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities in the United States. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida. Armour Residential operates under REITMortgage classification in the United States and is traded on New York Stock Exchange.

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Our tools can tell you how much better you can do entering a position in Armour Residential without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Armour Residential

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Armour Residential position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Armour Residential will appreciate offsetting losses from the drop in the long position's value.

Moving together with Armour Residential

0.63ACCAmerican Campus Comm DelistingPairCorr
The ability to find closely correlated positions to Armour Residential could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Armour Residential when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Armour Residential - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Armour Residential R to buy it.
The correlation of Armour Residential is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Armour Residential moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Armour Residential moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Armour Residential can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Please continue to Armour Residential Piotroski F Score and Armour Residential Altman Z Score analysis. Note that the Armour Residential information on this page should be used as a complementary analysis to other Armour Residential's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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Is Armour Residential's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Armour Residential. If investors know Armour will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Armour Residential listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.58
Market Capitalization
870.1 M
Quarterly Revenue Growth YOY
-0.34
Return On Assets
-0.016
Return On Equity
-0.11
The market value of Armour Residential is measured differently than its book value, which is the value of Armour that is recorded on the company's balance sheet. Investors also form their own opinion of Armour Residential's value that differs from its market value or its book value, called intrinsic value, which is Armour Residential's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Armour Residential's market value can be influenced by many factors that don't directly affect Armour Residential's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Armour Residential's value and its price as these two are different measures arrived at by different means. Investors typically determine Armour Residential value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Armour Residential's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.