Equity Beneish M Score

EQR -  USA Stock  

USD 73.76  2.06  2.72%

This module uses fundamental data of Equity Residential to approximate the value of its Beneish M Score. Equity 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. Continue to Equity Residential Piotroski F Score and Equity Residential Altman Z Score analysis.
  
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Equity Residential Issuance Repayment of Debt Securities is relatively stable at the moment as compared to the past year. Equity Residential reported last year Issuance Repayment of Debt Securities of 291.45 Million. As of 05/19/2022, Long Term Debt to Equity is likely to grow to 1.11, while Total Debt is likely to drop slightly above 8.5 B. Equity Residential Book Value per Share is relatively stable at the moment as compared to the past year. Equity Residential reported last year Book Value per Share of 29.30. As of 05/19/2022, Debt to Equity Ratio is likely to grow to 0.92, while Accrued Expenses Turnover is likely to drop 7.86.
At this time, it appears that Equity Residential is an unlikely manipulator. The earnings manipulation may begin if Equity 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 Equity 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 Equity 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.
-3.42
Beneish M Score - Unlikely Manipulator
Elasticity of ReceivablesN/AFocus
Asset Quality1.0Focus
Expense Coverage0.99Focus
Gross Margin Strengs0.98Focus
Accruals Factor0.99Focus
Depreciation Resistance1.03Focus
Net Sales Growth1.09Focus
Financial Leverage Condition0.9Focus

Equity 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 Equity 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
Revenues2.7 B2.5 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative Expense60.8 M56.5 M
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations1.4 B1.3 B
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion904.1 M851.4 M
Notably Up
Increasing
Slightly volatile
Total Assets23.1 B21.2 B
Significantly Up
Increasing
Slightly volatile
Investments108.7 M127.4 M
Fairly Down
Increasing
Slightly volatile
Property Plant and Equipment Net22.3 B20.4 B
Significantly Up
Increasing
Slightly volatile
Total Liabilities9.3 B9.5 B
Fairly Down
Decreasing
Slightly volatile
Current Assets117.7 M114.7 M
Fairly Up
Decreasing
Slightly volatile
Current Liabilities411.2 M419.4 M
Fairly Down
Increasing
Stable
Total Debt8.5 B8.7 B
Fairly Down
Decreasing
Slightly volatile
Operating Income751.3 M603.7 M
Fairly Up
Increasing
Slightly volatile
Gross Margin0.60.615
Fairly Down
Decreasing
Stable

Equity 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 Equity Residential's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Equity Residential in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Equity Residential's degree of accounting gimmicks and manipulations.

About Equity 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

948.53 Million

Share
Equity Residential Operating Expenses is relatively stable at the moment as compared to the past year. Equity Residential reported last year Operating Expenses of 911.55 Million

Equity Residential Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Equity Residential. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues2.47 B2.58 B2.7 B2.57 B2.46 B2.68 B
Total Assets20.57 B20.39 B21.17 B20.29 B21.17 B23.09 B
Current Assets100.76 M116.31 M117 M99.73 M114.69 M117.71 M
Property Plant and Equipment Net19.99 B19.81 B20.77 B19.84 B20.39 B22.29 B
Depreciation Amortization and Accretion747.58 M790.12 M842.78 M832.44 M851.38 M904.07 M
Selling General and Administrative Expense52.22 M53.81 M52.76 M48.3 M56.51 M60.78 M
Total Liabilities9.73 B9.62 B10.16 B9.18 B9.48 B9.31 B
Current Liabilities430.64 M438.95 M449.59 M466 M419.4 M411.23 M
Total Debt8.96 B8.82 B9.37 B8.37 B8.65 B8.53 B
Operating Income847.47 M857.81 M908.52 M786.18 M603.66 M751.25 M
Net Cash Flow from Operations1.27 B1.36 B1.46 B1.27 B1.26 B1.36 B
Investments58.25 M58.35 M52.24 M52.78 M127.45 M108.73 M

About Equity Residential Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Equity Residential's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Equity Residential using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Equity Residential 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.
Equity Residential is committed to creating communities where people thrive. Equity Residential owns or has investments in 305 properties consisting of 78,568 apartment units, located in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver. Equity Residential operates under REITResidential classification in the United States and is traded on New York Stock Exchange. It employs 2600 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Equity 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 Equity 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 Equity 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 Equity Residential will appreciate offsetting losses from the drop in the long position's value.

Equity Residential Pair Correlation

Correlation Analysis For Direct Indexing and Tax-loss Harvesting

The ability to find closely correlated positions to Equity 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 Equity 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 Equity 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 Equity Residential to buy it.
The correlation of Equity 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 Equity Residential moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Equity 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 Equity 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
Continue to Equity Residential Piotroski F Score and Equity Residential Altman Z Score analysis. Note that the Equity Residential information on this page should be used as a complementary analysis to other Equity 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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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Is Equity 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 Equity Residential. If investors know Equity 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 Equity Residential listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Equity Residential is measured differently than its book value, which is the value of Equity that is recorded on the company's balance sheet. Investors also form their own opinion of Equity Residential's value that differs from its market value or its book value, called intrinsic value, which is Equity 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 Equity Residential's market value can be influenced by many factors that don't directly affect Equity 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 Equity Residential's value and its price as these two are different measures arrived at by different means. Investors typically determine Equity Residential value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Equity 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.