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Apple Inc (NAS:AAPL)
Beneish M-Score
-2.12 (As of Today)

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.

Apple Inc has a M-score of -2.12 signals that the company is a manipulator.

AAPL' s 10-Year Beneish M-Score Range
Min: -4.54   Max: -0.96
Current: -2.12

-4.54
-0.96

During the past 13 years, the highest Beneish M-Score of Apple Inc was -0.96. The lowest was -4.54. And the median was -2.63.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Apple Inc 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 * 1.8383+0.528 * 0.953+0.404 * 1.0509+0.892 * 1.1483+0.115 * 1.1015
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9889+4.679 * -0.0978-0.327 * 1.29
=-2.12

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $29,976 Mil.
Revenue was 74599 + 42123 + 37432 + 45646 = $199,800 Mil.
Gross Profit was 29741 + 16009 + 14735 + 17947 = $78,432 Mil.
Total Current Assets was $83,403 Mil.
Total Assets was $261,894 Mil.
Property, Plant and Equipment(Net PPE) was $20,392 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,377 Mil.
Selling, General & Admin. Expense(SGA) was $12,540 Mil.
Total Current Liabilities was $73,611 Mil.
Long-Term Debt was $32,504 Mil.
Net Income was 18024 + 8467 + 7748 + 10223 = $44,462 Mil.
Non Operating Income was -353 + -97 + -137 + -100 = $-687 Mil.
Cash Flow from Operations was 33722 + 13250 + 10255 + 13538 = $70,765 Mil.
Accounts Receivable was $14,200 Mil.
Revenue was 57594 + 37472 + 35323 + 43603 = $173,992 Mil.
Gross Profit was 21846 + 13871 + 13024 + 16349 = $65,090 Mil.
Total Current Assets was $80,347 Mil.
Total Assets was $225,184 Mil.
Property, Plant and Equipment(Net PPE) was $15,488 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,313 Mil.
Selling, General & Admin. Expense(SGA) was $11,043 Mil.
Total Current Liabilities was $53,769 Mil.
Long-Term Debt was $16,961 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(29976 / 199800) / (14200 / 173992)
=0.15003003 / 0.08161295
=1.8383

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)
=(16009 / 173992) / (29741 / 199800)
=0.37409766 / 0.39255255
=0.953

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (83403 + 20392) / 261894) / (1 - (80347 + 15488) / 225184)
=0.60367553 / 0.5744147
=1.0509

4. SGI = Sales Growth Index

Ratio of sales 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
=199800 / 173992
=1.1483

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(7313 / (7313 + 15488)) / (8377 / (8377 + 20392))
=0.32073155 / 0.29118148
=1.1015

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(12540 / 199800) / (11043 / 173992)
=0.06276276 / 0.06346844
=0.9889

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)
=((32504 + 73611) / 261894) / ((16961 + 53769) / 225184)
=0.40518301 / 0.31409869
=1.29

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
=(44462 - -687 - 70765) / 261894
=-0.0978

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.

Apple Inc has a M-score of -2.12 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Apple Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.68721.00891.0520.94741.21261.07840.58711.4081.09771.246
GMI 0.93961.00110.85330.96490.87691.01940.97280.92271.1660.975
AQI 0.96842.37370.74791.66762.66661.39751.431.06990.96751.0878
SGI 1.68271.38651.24291.56171.14441.52021.65961.44581.0921.0695
DEPI 0.97391.20291.01280.87760.84451.1230.9371.0810.60471.0403
SGAI 0.77460.94140.97990.81280.9640.87470.82990.91380.98781.0354
LVGI 0.91951.24210.97540.85610.77121.13790.8720.91081.33771.3615
TATA -0.1032-0.0117-0.076-0.0952-0.0388-0.0589-0.0988-0.0486-0.0788-0.0853
M-score -2.62-1.67-2.74-2.16-1.67-2.06-2.51-1.89-2.76-2.69

Apple Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.4081.00820.84691.0141.09771.15891.31541.16061.2461.8383
GMI 0.92271.01211.11261.15251.1661.12031.04280.99680.9750.953
AQI 1.06991.00670.98710.93550.96751.03990.97751.0671.08781.0509
SGI 1.44581.28821.18791.13841.0921.05651.0411.05161.06951.1483
DEPI 1.0811.02930.86590.79710.60470.66040.76330.87291.04031.1015
SGAI 0.91380.96011.00520.98870.98781.01731.02361.0221.03540.9889
LVGI 0.91080.9580.8591.31351.33771.31381.6021.26831.36151.29
TATA -0.0486-0.0742-0.078-0.0733-0.0788-0.0685-0.0765-0.0777-0.0853-0.0978
M-score -1.89-2.53-2.73-2.76-2.76-2.67-2.73-2.73-2.69-2.12
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