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Apple Inc (NAS:AAPL)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

AAPL' s 10-Year Beneish M-Score Range
Min: -3.43   Max: -1.67
Current: -2.69

-3.43
-1.67

During the past 13 years, the highest Beneish M-Score of Apple Inc was -1.67. The lowest was -3.43. And the median was -2.57.


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 * 1.246+0.528 * 0.975+0.404 * 1.0878+0.892 * 1.0695+0.115 * 1.0403
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0354+4.679 * -0.0853-0.327 * 1.3615
=-2.69

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $17,460 Mil.
Revenue was 42123 + 37432 + 45646 + 57594 = $182,795 Mil.
Gross Profit was 16009 + 14735 + 17947 + 21846 = $70,537 Mil.
Total Current Assets was $68,531 Mil.
Total Assets was $231,839 Mil.
Property, Plant and Equipment(Net PPE) was $20,624 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,946 Mil.
Selling, General & Admin. Expense(SGA) was $11,993 Mil.
Total Current Liabilities was $63,448 Mil.
Long-Term Debt was $28,987 Mil.
Net Income was 8467 + 7748 + 10223 + 13072 = $39,510 Mil.
Non Operating Income was -97 + -137 + -100 + -97 = $-431 Mil.
Cash Flow from Operations was 13250 + 10255 + 13538 + 22670 = $59,713 Mil.
Accounts Receivable was $13,102 Mil.
Revenue was 37472 + 35323 + 43603 + 54512 = $170,910 Mil.
Gross Profit was 13871 + 13024 + 16349 + 21060 = $64,304 Mil.
Total Current Assets was $73,286 Mil.
Total Assets was $207,000 Mil.
Property, Plant and Equipment(Net PPE) was $16,597 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,757 Mil.
Selling, General & Admin. Expense(SGA) was $10,830 Mil.
Total Current Liabilities was $43,658 Mil.
Long-Term Debt was $16,960 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)
=(17460 / 182795) / (13102 / 170910)
=0.09551684 / 0.07666023
=1.246

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)
=(14735 / 170910) / (16009 / 182795)
=0.37624481 / 0.38588036
=0.975

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 - (68531 + 20624) / 231839) / (1 - (73286 + 16597) / 207000)
=0.61544434 / 0.56578261
=1.0878

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
=182795 / 170910
=1.0695

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))
=(6757 / (6757 + 16597)) / (7946 / (7946 + 20624))
=0.28932945 / 0.27812391
=1.0403

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)
=(11993 / 182795) / (10830 / 170910)
=0.06560902 / 0.06336668
=1.0354

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)
=((28987 + 63448) / 231839) / ((16960 + 43658) / 207000)
=0.39870341 / 0.29284058
=1.3615

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
=(39510 - -431 - 59713) / 231839
=-0.0853

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 -2.69 suggests that the company will not 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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.84591.4081.00820.84691.0141.09771.15891.31541.16061.246
GMI 0.90280.92271.01211.11261.15251.1661.12031.04280.99680.975
AQI 1.23971.06991.00670.98710.93550.96751.03990.97751.0671.0878
SGI 1.48331.44581.28821.18791.13841.0921.05651.0411.05161.0695
DEPI 0.89951.0811.02930.86590.79710.60470.66040.76330.87291.0403
SGAI 0.89770.91380.96011.00520.98870.98781.01731.02361.0221.0354
LVGI 0.80670.91080.9580.8591.31351.33771.31381.6021.26831.3615
TATA -0.0698-0.0486-0.0742-0.078-0.0733-0.0788-0.0685-0.0765-0.0777-0.0853
M-score -2.40-1.89-2.53-2.73-2.76-2.76-2.67-2.73-2.73-2.69
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