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Apple Inc (NAS:AAPL)
Beneish M-Score
-2.98 (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 -2.98 suggests that the company is not a manipulator.

AAPL' s Beneish M-Score Range Over the Past 10 Years
Min: -4.54   Max: -1.27
Current: -2.98

-4.54
-1.27

During the past 13 years, the highest Beneish M-Score of Apple Inc was -1.27. The lowest was -4.54. And the median was -2.79.


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 * 0.6591+0.528 * 0.9781+0.404 * 1.1001+0.892 * 1.1761+0.115 * 0.8492
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9884+4.679 * -0.0698-0.327 * 1.088
=-2.98

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $12,953 Mil.
Revenue was 75872 + 51501 + 49605 + 58010 = $234,988 Mil.
Gross Profit was 30423 + 20548 + 19681 + 23656 = $94,308 Mil.
Total Current Assets was $76,219 Mil.
Total Assets was $293,284 Mil.
Property, Plant and Equipment(Net PPE) was $22,300 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,636 Mil.
Selling, General & Admin. Expense(SGA) was $14,577 Mil.
Total Current Liabilities was $76,092 Mil.
Long-Term Debt was $53,204 Mil.
Net Income was 18361 + 11124 + 10677 + 13569 = $53,731 Mil.
Non Operating Income was -263 + -149 + -175 + -226 = $-813 Mil.
Cash Flow from Operations was 27463 + 13475 + 14988 + 19081 = $75,007 Mil.
Accounts Receivable was $16,709 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.



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)
=(12953 / 234988) / (16709 / 199800)
=0.05512196 / 0.08362863
=0.6591

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)
=(20548 / 199800) / (30423 / 234988)
=0.39255255 / 0.40133113
=0.9781

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 - (76219 + 22300) / 293284) / (1 - (83403 + 20392) / 261894)
=0.66408328 / 0.60367553
=1.1001

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
=234988 / 199800
=1.1761

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))
=(8377 / (8377 + 20392)) / (11636 / (11636 + 22300))
=0.29118148 / 0.34288072
=0.8492

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)
=(14577 / 234988) / (12540 / 199800)
=0.06203295 / 0.06276276
=0.9884

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)
=((53204 + 76092) / 293284) / ((32504 + 73611) / 261894)
=0.44085596 / 0.40518301
=1.088

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
=(53731 - -813 - 75007) / 293284
=-0.0698

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 -2.98 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 1.00891.0520.94741.21261.07840.58711.4081.09771.2460.7548
GMI 1.00110.85330.96490.87691.01940.97280.92271.1660.9750.9633
AQI 2.37370.74791.66762.66661.39751.431.06990.96751.08780.9992
SGI 1.38651.24291.56171.14441.52021.65961.44581.0921.06951.2786
DEPI 1.20291.01280.87760.84451.1230.9371.0810.60471.04030.8333
SGAI 0.94140.97990.81280.9640.87470.82990.91380.98781.03540.9345
LVGI 1.24210.97540.85610.77121.13790.8720.91081.33771.36151.1576
TATA -0.0117-0.076-0.0952-0.0388-0.0589-0.0988-0.0486-0.0788-0.0853-0.0928
M-score -1.67-2.74-2.16-1.67-2.06-2.51-1.89-2.76-2.69-2.97

Apple Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.09771.15891.31541.16061.2461.02470.93280.76330.75480.6591
GMI 1.1661.12031.04280.99680.9750.9530.95520.96690.96330.9781
AQI 0.96751.03990.97751.0671.08781.05091.13491.07670.99921.1001
SGI 1.0921.05651.0411.05161.06951.14831.20521.25931.27861.1761
DEPI 0.60470.66040.76330.87291.04031.10151.07730.94680.83330.8492
SGAI 0.98781.01731.02361.0221.03540.98890.95930.9510.93450.9884
LVGI 1.33771.31381.6021.26831.36151.291.2951.22041.15761.088
TATA -0.0788-0.0685-0.0765-0.0777-0.0853-0.0978-0.106-0.1078-0.0928-0.0698
M-score -2.76-2.67-2.73-2.73-2.69-2.87-2.90-3.03-2.97-2.98
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