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Apple Inc (NAS:AAPL)
Beneish M-Score
-2.65 (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 -2.64 suggests that the company is not a manipulator.

AAPL' s Beneish M-Score Range Over the Past 10 Years
Min: -4.54   Max: -1.04
Current: -2.65

-4.54
-1.04

During the past 13 years, the highest Beneish M-Score of Apple Inc was -1.04. 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 * 1.1504+0.528 * 1.0055+0.404 * 0.9202+0.892 * 0.982+0.115 * 1.0663
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0653+4.679 * -0.0464-0.327 * 1.1137
=-2.64

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $11,714 Mil.
Revenue was 42358 + 50557 + 75872 + 51501 = $220,288 Mil.
Gross Profit was 16106 + 19921 + 30423 + 20548 = $86,998 Mil.
Total Current Assets was $93,761 Mil.
Total Assets was $305,602 Mil.
Property, Plant and Equipment(Net PPE) was $25,448 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,076 Mil.
Selling, General & Admin. Expense(SGA) was $14,417 Mil.
Total Current Liabilities was $71,486 Mil.
Long-Term Debt was $68,939 Mil.
Net Income was 7796 + 10516 + 18361 + 11124 = $47,797 Mil.
Non Operating Income was -263 + -510 + -263 + -149 = $-1,185 Mil.
Cash Flow from Operations was 10634 + 11601 + 27463 + 13475 = $63,173 Mil.
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.



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)
=(11714 / 220288) / (10370 / 224337)
=0.05317584 / 0.0462251
=1.1504

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)
=(89087 / 224337) / (86998 / 220288)
=0.39711238 / 0.39492846
=1.0055

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 - (93761 + 25448) / 305602) / (1 - (70953 + 21149) / 273151)
=0.60992075 / 0.66281654
=0.9202

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
=220288 / 224337
=0.982

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))
=(10107 / (10107 + 21149)) / (11076 / (11076 + 25448))
=0.32336191 / 0.30325266
=1.0663

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)
=(14417 / 220288) / (13782 / 224337)
=0.06544614 / 0.06143436
=1.0653

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)
=((68939 + 71486) / 305602) / ((47419 + 65285) / 273151)
=0.45950288 / 0.41260695
=1.1137

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
=(47797 - -1185 - 63173) / 305602
=-0.0464

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 -2.64 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 1.00891.02750.96991.21261.07840.58711.4081.09771.2460.7548
GMI 1.00110.87380.94230.87691.01940.97280.92271.1660.9750.9633
AQI 2.37370.74791.66762.66661.39751.431.06990.96751.08780.9992
SGI 1.38651.27251.52541.14441.52021.65961.44581.0921.06951.2786
DEPI 1.20291.01280.87760.84451.1230.9371.0810.60471.04030.8333
SGAI 0.94140.95710.83210.9640.87470.82990.91380.98781.03540.9345
LVGI 1.24210.97540.85610.77121.13790.8720.91081.33771.36151.1576
TATA -0.0117-0.1016-0.0952-0.0388-0.0589-0.0988-0.0486-0.0788-0.0853-0.0928
M-score -1.67-2.84-2.18-1.67-2.06-2.51-1.89-2.76-2.69-2.97

Apple Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.31541.16061.2461.02470.93280.76330.75480.65911.04571.1504
GMI 1.04280.99680.9750.9530.95520.96690.96330.97810.99631.0055
AQI 0.97751.0671.08781.05091.13491.07670.99921.10010.9610.9202
SGI 1.0411.05161.06951.14831.20521.25931.27861.17611.07240.982
DEPI 0.76330.87291.04031.10151.07730.94680.83330.84920.92231.0663
SGAI 1.02361.0221.03540.98890.95930.9510.93450.98841.03751.0653
LVGI 1.6021.26831.36151.291.2951.22041.15761.0881.19191.1137
TATA -0.0765-0.0777-0.0853-0.0978-0.106-0.1078-0.0928-0.0698-0.0516-0.0464
M-score -2.73-2.73-2.69-2.87-2.90-3.03-2.97-2.98-2.71-2.64
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