Switch to:
Adobe Systems Inc (NAS:ADBE)
Beneish M-Score
-2.67 (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.

Adobe Systems Inc has a M-score of -2.67 suggests that the company is not a manipulator.

ADBE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.18   Max: -0.68
Current: -2.67

-4.18
-0.68

During the past 13 years, the highest Beneish M-Score of Adobe Systems Inc was -0.68. The lowest was -4.18. And the median was -2.85.


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 Adobe Systems 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 * 1.0122+0.528 * 0.9891+0.404 * 0.9233+0.892 * 1.217+0.115 * 1.0022
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9113+4.679 * -0.0774-0.327 * 1.0374
=-2.67

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Aug16) TTM:Last Year (Aug15) TTM:
Accounts Receivable was $731 Mil.
Revenue was 1463.967 + 1398.709 + 1383.335 + 1306.404 = $5,552 Mil.
Gross Profit was 1261.266 + 1196.63 + 1184.763 + 1105.043 = $4,748 Mil.
Total Current Assets was $5,419 Mil.
Total Assets was $12,367 Mil.
Property, Plant and Equipment(Net PPE) was $812 Mil.
Depreciation, Depletion and Amortization(DDA) was $336 Mil.
Selling, General & Admin. Expense(SGA) was $2,420 Mil.
Total Current Liabilities was $2,506 Mil.
Long-Term Debt was $1,917 Mil.
Net Income was 270.788 + 244.074 + 254.307 + 222.705 = $992 Mil.
Non Operating Income was -7.592 + -8.717 + -7.659 + 14.789 = $-9 Mil.
Cash Flow from Operations was 517.885 + 488.715 + 497.527 + 454.515 = $1,959 Mil.
Accounts Receivable was $594 Mil.
Revenue was 1217.768 + 1162.158 + 1109.181 + 1073.328 = $4,562 Mil.
Gross Profit was 1026.783 + 976.985 + 942.383 + 912.385 = $3,859 Mil.
Total Current Assets was $4,526 Mil.
Total Assets was $11,508 Mil.
Property, Plant and Equipment(Net PPE) was $797 Mil.
Depreciation, Depletion and Amortization(DDA) was $331 Mil.
Selling, General & Admin. Expense(SGA) was $2,182 Mil.
Total Current Liabilities was $2,061 Mil.
Long-Term Debt was $1,906 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)
=(731.166 / 5552.415) / (593.554 / 4562.435)
=0.13168432 / 0.13009588
=1.0122

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)
=(3858.536 / 4562.435) / (4747.702 / 5552.415)
=0.84571857 / 0.85506973
=0.9891

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 - (5418.71 + 811.524) / 12367.441) / (1 - (4525.888 + 797.464) / 11508.395)
=0.49623904 / 0.5374375
=0.9233

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
=5552.415 / 4562.435
=1.217

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))
=(331.261 / (331.261 + 797.464)) / (336.034 / (336.034 + 811.524))
=0.29348247 / 0.29282529
=1.0022

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)
=(2419.912 / 5552.415) / (2182.033 / 4562.435)
=0.43583054 / 0.47826062
=0.9113

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)
=((1916.591 + 2505.666) / 12367.441) / ((1906.094 + 2060.814) / 11508.395)
=0.35757252 / 0.34469689
=1.0374

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
=(991.874 - -9.179 - 1958.642) / 12367.441
=-0.0774

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.

Adobe Systems Inc has a M-score of -2.67 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 local exchange's currency.

Adobe Systems Inc Annual Data

Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14Nov15
DSRI 1.57260.72711.29551.06871.04591.03140.93161.05530.96480.982
GMI 1.06350.99860.98770.99941.00610.99741.00671.04071.00631.0062
AQI 3.55531.04360.95481.27420.90580.94910.95031.10240.91561.0423
SGI 1.30971.22621.13360.82291.28991.10951.04450.92091.02261.1564
DEPI 0.77211.10381.1251.10011.0671.16581.08890.94961.14730.9474
SGAI 1.10740.93180.99931.09090.98530.99691.03761.19141.0030.8725
LVGI 0.57711.31331.2811.32531.2520.96650.89971.05681.08351.113
TATA -0.081-0.1247-0.0731-0.0976-0.0397-0.0766-0.0646-0.081-0.0933-0.0721
M-score -0.90-3.17-2.53-3.03-2.47-2.70-2.79-2.87-2.97-2.70

Adobe Systems Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
DSRI 1.17141.0240.96480.99180.89231.01340.9820.94481.08751.0122
GMI 1.02281.01471.00631.00891.011.00761.00621.00310.99450.9891
AQI 1.09630.93070.91561.02951.0261.03891.04230.91270.9110.9233
SGI 0.96540.98761.02261.05151.05971.10861.15641.19111.21981.217
DEPI 0.97881.13321.14731.15361.13580.97890.94740.95570.97661.0022
SGAI 1.10941.081.0030.96220.94110.88530.87250.88370.8790.9113
LVGI 1.11431.0841.08351.14141.14581.14941.1131.04041.0241.0374
TATA -0.0822-0.0902-0.0933-0.0818-0.0846-0.0787-0.0721-0.0828-0.0737-0.0774
M-score -2.75-2.94-2.97-2.83-2.93-2.75-2.70-2.78-2.58-2.67
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK