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Apple Inc (NAS:AAPL)
Beneish M-Score
-3.03 (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 -3.03 suggests that the company is not a manipulator.

AAPL' s 10-Year Beneish M-Score Range
Min: -4.54   Max: -0.96
Current: -3.03

-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 -2.65.


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 * 0.7633+0.528 * 0.9669+0.404 * 1.0767+0.892 * 1.2593+0.115 * 0.9468
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.951+4.679 * -0.1078-0.327 * 1.2204
=-3.03

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $10,370 Mil.
Revenue was 49605 + 58010 + 74599 + 42123 = $224,337 Mil.
Gross Profit was 19681 + 23656 + 29741 + 16009 = $89,087 Mil.
Total Current Assets was $70,953 Mil.
Total Assets was $273,151 Mil.
Property, Plant and Equipment(Net PPE) was $21,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $10,107 Mil.
Selling, General & Admin. Expense(SGA) was $13,782 Mil.
Total Current Liabilities was $65,285 Mil.
Long-Term Debt was $47,419 Mil.
Net Income was 10677 + 13569 + 18024 + 8467 = $50,737 Mil.
Non Operating Income was -175 + -226 + -353 + -97 = $-851 Mil.
Cash Flow from Operations was 14988 + 19081 + 33722 + 13250 = $81,041 Mil.
Accounts Receivable was $10,788 Mil.
Revenue was 37432 + 45646 + 57594 + 37472 = $178,144 Mil.
Gross Profit was 14735 + 17947 + 21846 + 13871 = $68,399 Mil.
Total Current Assets was $67,949 Mil.
Total Assets was $222,520 Mil.
Property, Plant and Equipment(Net PPE) was $17,585 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,760 Mil.
Selling, General & Admin. Expense(SGA) was $11,508 Mil.
Total Current Liabilities was $46,205 Mil.
Long-Term Debt was $29,030 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)
=(10370 / 224337) / (10788 / 178144)
=0.0462251 / 0.06055775
=0.7633

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)
=(23656 / 178144) / (19681 / 224337)
=0.38395343 / 0.39711238
=0.9669

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 - (70953 + 21149) / 273151) / (1 - (67949 + 17585) / 222520)
=0.66281654 / 0.61561208
=1.0767

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
=224337 / 178144
=1.2593

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))
=(7760 / (7760 + 17585)) / (10107 / (10107 + 21149))
=0.30617479 / 0.32336191
=0.9468

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)
=(13782 / 224337) / (11508 / 178144)
=0.06143436 / 0.06459943
=0.951

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)
=((47419 + 65285) / 273151) / ((29030 + 46205) / 222520)
=0.41260695 / 0.33810444
=1.2204

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
=(50737 - -851 - 81041) / 273151
=-0.1078

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 -3.03 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.84691.0141.09771.15891.31541.16061.2461.02470.93280.7633
GMI 1.11261.15251.1661.12031.04280.99680.9750.9530.95520.9669
AQI 0.98710.93550.96751.03990.97751.0671.08781.05091.13491.0767
SGI 1.18791.13841.0921.05651.0411.05161.06951.14831.20521.2593
DEPI 0.86590.79710.60470.66040.76330.87291.04031.10151.07730.9468
SGAI 1.00520.98870.98781.01731.02361.0221.03540.98890.95930.951
LVGI 0.8591.31351.33771.31381.6021.26831.36151.291.2951.2204
TATA -0.078-0.0733-0.0788-0.0685-0.0765-0.0777-0.0853-0.0978-0.106-0.1078
M-score -2.73-2.76-2.76-2.67-2.73-2.73-2.69-2.87-2.90-3.03
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