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Apache Corporation (NYSE:APA)
Beneish M-Score
-3.08 (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 Corporation has a M-score of -3.08 suggests that the company is not a manipulator.

APA' s 10-Year Beneish M-Score Range
Min: -4.37   Max: 6.42
Current: -3.08

-4.37
6.42

During the past 13 years, the highest Beneish M-Score of Apache Corporation was 6.42. The lowest was -4.37. And the median was -2.62.


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 Corporation 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 * 0.9397+0.528 * 0.9964+0.404 * 1.3361+0.892 * 0.8791+0.115 * 0.8698
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0437+4.679 * -0.1285-0.327 * 0.8451
=-3.08

* 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 $2,407 Mil.
Revenue was 3484 + 3675 + 3576 + 4019 = $14,754 Mil.
Gross Profit was 2805 + 3008 + 2879 + 3117 = $11,809 Mil.
Total Current Assets was $5,126 Mil.
Total Assets was $61,171 Mil.
Property, Plant and Equipment(Net PPE) was $52,470 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,701 Mil.
Selling, General & Admin. Expense(SGA) was $467 Mil.
Total Current Liabilities was $4,570 Mil.
Long-Term Debt was $9,674 Mil.
Net Income was 505 + 236 + 174 + 306 = $1,221 Mil.
Non Operating Income was -1 + -2 + 0 + 0 = $-3 Mil.
Cash Flow from Operations was 2339 + 2293 + 2477 + 1978 = $9,087 Mil.
Accounts Receivable was $2,914 Mil.
Revenue was 4268 + 3946 + 4391 + 4179 = $16,784 Mil.
Gross Profit was 3410 + 3151 + 3533 + 3292 = $13,386 Mil.
Total Current Assets was $4,758 Mil.
Total Assets was $63,350 Mil.
Property, Plant and Equipment(Net PPE) was $55,821 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,099 Mil.
Selling, General & Admin. Expense(SGA) was $509 Mil.
Total Current Liabilities was $5,158 Mil.
Long-Term Debt was $12,297 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)
=(2407 / 14754) / (2914 / 16784)
=0.1631422 / 0.17361773
=0.9397

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)
=(3008 / 16784) / (2805 / 14754)
=0.79754528 / 0.80039311
=0.9964

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 - (5126 + 52470) / 61171) / (1 - (4758 + 55821) / 63350)
=0.05844273 / 0.04374112
=1.3361

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
=14754 / 16784
=0.8791

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))
=(6099 / (6099 + 55821)) / (6701 / (6701 + 52470))
=0.09849806 / 0.11324804
=0.8698

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)
=(467 / 14754) / (509 / 16784)
=0.03165243 / 0.0303265
=1.0437

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)
=((9674 + 4570) / 61171) / ((12297 + 5158) / 63350)
=0.23285544 / 0.27553275
=0.8451

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
=(1221 - -3 - 9087) / 61171
=-0.1285

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 Corporation has a M-score of -3.08 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 Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.15551.08081.04620.97420.5671.630.98361.03310.99111.0176
GMI 0.99530.96811.03221.00720.98170.84641.20340.98671.02441.0219
AQI 0.91430.87311.17451.17141.17130.93191.66520.83711.18791.1256
SGI 1.27261.42221.09291.20381.23550.69881.40361.39661.01130.94
DEPI 1.07391.04150.9940.92120.34491.33092.48010.88310.71921.0388
SGAI 0.98250.80490.97531.08120.84981.7040.78730.86491.1441.0077
LVGI 0.98510.90981.05590.97191.09091.02421.0270.84351.23220.8384
TATA -0.0948-0.0859-0.0704-0.0972-0.2163-0.1599-0.0851-0.1031-0.1071-0.1234
M-score -2.56-2.43-2.61-2.72-3.70-3.12-1.96-2.59-3.02-2.98

Apache Corporation Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.96860.90331.09690.99111.04221.13321.05941.03340.84690.9397
GMI 1.02420.99141.00851.02441.04061.03481.02521.01780.99990.9964
AQI 1.1371.10921.18691.18790.93211.02451.03591.12561.10661.3361
SGI 1.31141.16471.05981.01130.94220.97960.97880.92570.94240.8791
DEPI 0.80880.80170.74110.71920.8991.07081.06811.03880.98620.8698
SGAI 0.89471.04011.12931.1441.15071.03091.01371.00091.02821.0437
LVGI 0.84661.01181.19961.23221.20961.06590.93560.83840.8320.8451
TATA -0.1077-0.1168-0.1136-0.1071-0.1168-0.1027-0.1118-0.1236-0.1268-0.1285
M-score -2.62-2.96-2.91-3.02-3.15-2.85-2.91-2.98-3.17-3.08
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