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Apache Corp (NYSE:APA)
Beneish M-Score
-9.29 (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 -9.29 suggests that the company is not a manipulator.

APA' s Beneish M-Score Range Over the Past 10 Years
Min: -9.29   Max: -1.65
Current: -9.29

-9.29
-1.65

During the past 13 years, the highest Beneish M-Score of Apache Corp was -1.65. The lowest was -9.29. And the median was -2.74.


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 * 1.2363+0.528 * 1.1895+0.404 * 1.9736+0.892 * 0.5008+0.115 * 0.249
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6746+4.679 * -1.3915-0.327 * 2.1149
=-9.29

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,253 Mil.
Revenue was 1263 + 1496 + 1977 + 1818 = $6,554 Mil.
Gross Profit was 759 + 988 + 1461 + 1224 = $4,432 Mil.
Total Current Assets was $3,752 Mil.
Total Assets was $18,842 Mil.
Property, Plant and Equipment(Net PPE) was $14,119 Mil.
Depreciation, Depletion and Amortization(DDA) was $29,372 Mil.
Selling, General & Admin. Expense(SGA) was $374 Mil.
Total Current Liabilities was $1,841 Mil.
Long-Term Debt was $8,777 Mil.
Net Income was -7213 + -5655 + -5600 + -4651 = $-23,119 Mil.
Non Operating Income was 58 + 62 + -2 + -2 = $116 Mil.
Cash Flow from Operations was 262 + 789 + 1283 + 650 = $2,984 Mil.
Accounts Receivable was $2,024 Mil.
Revenue was 2683 + 3441 + 3289 + 3675 = $13,088 Mil.
Gross Profit was 2071 + 2786 + 2663 + 3008 = $10,528 Mil.
Total Current Assets was $6,415 Mil.
Total Assets was $55,952 Mil.
Property, Plant and Equipment(Net PPE) was $48,076 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,720 Mil.
Selling, General & Admin. Expense(SGA) was $446 Mil.
Total Current Liabilities was $3,664 Mil.
Long-Term Debt was $11,245 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)
=(1253 / 6554) / (2024 / 13088)
=0.19118096 / 0.15464548
=1.2363

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)
=(988 / 13088) / (759 / 6554)
=0.80440098 / 0.67622826
=1.1895

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 - (3752 + 14119) / 18842) / (1 - (6415 + 48076) / 55952)
=0.05153381 / 0.02611167
=1.9736

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
=6554 / 13088
=0.5008

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))
=(9720 / (9720 + 48076)) / (29372 / (29372 + 14119))
=0.16817773 / 0.67535812
=0.249

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)
=(374 / 6554) / (446 / 13088)
=0.05706439 / 0.03407702
=1.6746

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)
=((8777 + 1841) / 18842) / ((11245 + 3664) / 55952)
=0.56352829 / 0.26646054
=2.1149

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
=(-23119 - 116 - 2984) / 18842
=-1.3915

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 -9.29 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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.10141.09740.89991.0190.9310.75640.89910.87770.92971.2363
GMI 1.01631.02211.00350.9980.9860.99021.02971.05811.12871.1895
AQI 1.03591.12561.10661.33611.26240.56470.65450.72880.84261.9736
SGI 0.94150.87160.88690.81060.7960.90650.79280.75210.62640.5008
DEPI 1.16281.13651.07920.97710.94580.59840.33830.22060.19940.249
SGAI 1.00651.06931.06431.14611.15351.0251.13021.21931.40431.6746
LVGI 0.93560.83840.8320.84510.9761.14281.35831.46661.5782.1149
TATA -0.1098-0.1275-0.1308-0.1325-0.1593-0.2497-0.3539-0.6305-0.9164-1.3915
M-score -2.89-2.98-3.19-3.09-3.40-4.23-4.75-6.12-7.51-9.29
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