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Apple Inc (NAS:AAPL)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

AAPL' s 10-Year Beneish M-Score Range
Min: -4.54   Max: -0.35
Current: -2.7

-4.54
-0.35

During the past 13 years, the highest Beneish M-Score of Apple Inc was -0.35. The lowest was -4.54. And the median was -2.60.


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 * 1.1904+0.528 * 0.9968+0.404 * 1.067+0.892 * 1.0516+0.115 * 0.8729
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.022+4.679 * -0.0777-0.327 * 1.2683
=-2.70

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $16,841 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.
Net Income was 7748 + 10223 + 13072 + 7512 = $38,555 Mil.
Non Operating Income was -137 + -100 + -97 + -194 = $-528 Mil.
Cash Flow from Operations was 10255 + 13538 + 22670 + 9908 = $56,371 Mil.
Accounts Receivable was $13,453 Mil.
Revenue was 35323 + 43603 + 54512 + 35966 = $169,404 Mil.
Gross Profit was 13024 + 16349 + 21060 + 14401 = $64,834 Mil.
Total Current Assets was $68,219 Mil.
Total Assets was $199,856 Mil.
Property, Plant and Equipment(Net PPE) was $16,327 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,955 Mil.
Selling, General & Admin. Expense(SGA) was $10,708 Mil.
Total Current Liabilities was $36,319 Mil.
Long-Term Debt was $16,958 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)
=(16841 / 178144) / (13453 / 169404)
=0.09453588 / 0.07941371
=1.1904

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)
=(17947 / 169404) / (14735 / 178144)
=0.38271824 / 0.38395343
=0.9968

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 - (67949 + 17585) / 222520) / (1 - (68219 + 16327) / 199856)
=0.61561208 / 0.57696542
=1.067

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
=178144 / 169404
=1.0516

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))
=(5955 / (5955 + 16327)) / (7760 / (7760 + 17585))
=0.26725608 / 0.30617479
=0.8729

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)
=(11508 / 178144) / (10708 / 169404)
=0.06459943 / 0.06320984
=1.022

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)
=((29030 + 46205) / 222520) / ((16958 + 36319) / 199856)
=0.33810444 / 0.26657694
=1.2683

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
=(38555 - -528 - 56371) / 222520
=-0.0777

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 -2.70 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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 0.75760.68721.00892.58920.74760.93941.29090.71141.10341.0112
GMI 1.00940.93961.00110.85330.96490.87691.01940.97280.92271.166
AQI 0.94140.96842.37370.74791.66762.66661.39751.431.06990.9675
SGI 1.33381.68271.38651.24291.56171.14441.52021.65961.44581.092
DEPI 0.82560.97391.20291.01280.87760.84451.1230.9371.0810.6047
SGAI 0.88460.77460.94140.97990.81280.9640.87470.82990.91380.9878
LVGI 0.95220.91951.24210.97540.85610.77121.13790.8720.91081.3377
TATA -0.0825-0.1032-0.0117-0.076-0.0952-0.0388-0.0589-0.0988-0.0548-0.0788
M-score -2.79-2.62-1.67-1.32-2.34-1.92-1.86-2.40-2.20-2.84

Apple Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.76230.84031.10341.01410.81540.82651.01121.10761.13961.1904
GMI 0.88890.90280.92271.01211.11261.15251.1661.12031.04280.9968
AQI 1.37891.23971.06991.00670.98710.93550.96751.03990.97751.067
SGI 1.62791.48331.44581.28821.18791.13841.0921.05651.0411.0516
DEPI 0.83160.89951.0811.02930.86590.79710.60470.66040.76330.8729
SGAI 0.81840.89770.91380.96011.00520.98870.98781.01731.02361.022
LVGI 0.8280.80670.91080.9580.8591.31351.33771.31381.6021.2683
TATA -0.0944-0.0732-0.0535-0.0807-0.0832-0.077-0.0808-0.0685-0.0765-0.0777
M-score -2.42-2.42-2.20-2.55-2.79-2.95-2.84-2.72-2.89-2.70
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