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Apache Corp (NYSE:APA)
Beneish M-Score
-5.98 (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.

Apache Corp has a M-score of -5.98 suggests that the company is not a manipulator.

APA' s Beneish M-Score Range Over the Past 10 Years
Min: -8.14   Max: -0.64
Current: -5.98

-8.14
-0.64

During the past 13 years, the highest Beneish M-Score of Apache Corp was -0.64. The lowest was -8.14. And the median was -2.77.


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 Apache Corp 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 * 1.2313+0.528 * 1.1941+0.404 * 0.8785+0.892 * 0.5193+0.115 * 0.4041
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7299+4.679 * -0.6553-0.327 * 1.2375
=-5.98

* 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 $1,016 Mil.
Revenue was 1382 + 1052 + 1263 + 1496 = $5,193 Mil.
Gross Profit was 971 + 622 + 759 + 988 = $3,340 Mil.
Total Current Assets was $3,292 Mil.
Total Assets was $24,346 Mil.
Property, Plant and Equipment(Net PPE) was $20,143 Mil.
Depreciation, Depletion and Amortization(DDA) was $29,099 Mil.
Selling, General & Admin. Expense(SGA) was $380 Mil.
Total Current Liabilities was $1,570 Mil.
Long-Term Debt was $8,719 Mil.
Net Income was -244 + -489 + -7213 + -5655 = $-13,601 Mil.
Non Operating Income was 102 + -54 + 58 + 62 = $168 Mil.
Cash Flow from Operations was 707 + 276 + 262 + 940 = $2,185 Mil.
Accounts Receivable was $1,589 Mil.
Revenue was 2246 + 1630 + 2683 + 3441 = $10,000 Mil.
Gross Profit was 1730 + 1093 + 2071 + 2786 = $7,680 Mil.
Total Current Assets was $5,493 Mil.
Total Assets was $35,312 Mil.
Property, Plant and Equipment(Net PPE) was $28,315 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,882 Mil.
Selling, General & Admin. Expense(SGA) was $423 Mil.
Total Current Liabilities was $2,383 Mil.
Long-Term Debt was $9,676 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)
=(1016 / 5193) / (1589 / 10000)
=0.19564799 / 0.1589
=1.2313

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)
=(7680 / 10000) / (3340 / 5193)
=0.768 / 0.6431735
=1.1941

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 - (3292 + 20143) / 24346) / (1 - (5493 + 28315) / 35312)
=0.03741888 / 0.04259175
=0.8785

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
=5193 / 10000
=0.5193

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))
=(8882 / (8882 + 28315)) / (29099 / (29099 + 20143))
=0.2387827 / 0.59093863
=0.4041

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)
=(380 / 5193) / (423 / 10000)
=0.07317543 / 0.0423
=1.7299

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)
=((8719 + 1570) / 24346) / ((9676 + 2383) / 35312)
=0.42261562 / 0.34149864
=1.2375

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
=(-13601 - 168 - 2185) / 24346
=-0.6553

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.

Apache Corp has a M-score of -5.98 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.

Apache Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0740.95050.56331.63850.98341.03311.02191.09740.77331.2449
GMI 1.03451.00120.98451.05410.96730.98671.01731.02210.99091.1898
AQI 1.17451.17141.17130.93161.66590.83711.18791.12560.56471.9736
SGI 1.06461.23381.24370.69531.40361.39660.98080.87160.88660.4973
DEPI 0.99150.92120.34491.3312.480.88310.74031.13650.59840.249
SGAI 1.00121.05490.84421.71310.7870.86491.1441.07151.05751.6809
LVGI 1.05590.97191.0771.03741.0270.84351.23220.83841.14282.1149
TATA -0.0821-0.1014-0.2265-0.1683-0.0847-0.1061-0.1072-0.1272-0.2514-1.3986
M-score -2.67-2.73-3.74-3.05-2.08-2.60-3.02-2.98-4.25-9.32

Apache Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.89991.0190.9310.75640.91440.87060.92041.22121.15561.2313
GMI 1.00350.9980.9860.99021.02781.04761.11341.16791.15251.1941
AQI 1.10661.33611.26240.56470.65450.72880.84261.97361.66310.8785
SGI 0.88690.81060.7960.90650.77950.75830.63280.5070.54850.5193
DEPI 1.07920.97710.94580.59840.33980.40790.19940.2490.46680.4041
SGAI 1.06431.14611.15351.0251.15761.2181.40081.66741.66451.7299
LVGI 0.8320.84510.9761.14281.35831.46661.5782.11491.87161.2375
TATA -0.1312-0.1338-0.1606-0.2511-0.3531-0.4928-0.7469-1.1414-0.962-0.6553
M-score -3.19-3.10-3.40-4.24-4.75-5.46-6.73-8.14-7.35-5.98
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