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Apache Corporation (NYSE:APA)
Beneish M-Score
-3.37 (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 -3.37 suggests that the company is not a manipulator.

APA' s 10-Year Beneish M-Score Range
Min: -4.42   Max: -0.6
Current: -3.37

-4.42
-0.6

During the past 13 years, the highest Beneish M-Score of Apache Corporation was -0.60. The lowest was -4.42. And the median was -2.72.


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 * 0.8243+0.528 * 0.9906+0.404 * 1.2624+0.892 * 0.8991+0.115 * 0.8469
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.033+4.679 * -0.1545-0.327 * 0.976
=-3.37

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,287 Mil.
Revenue was 3740 + 3484 + 3675 + 3940 = $14,839 Mil.
Gross Profit was 3021 + 2805 + 3008 + 3093 = $11,927 Mil.
Total Current Assets was $4,426 Mil.
Total Assets was $60,990 Mil.
Property, Plant and Equipment(Net PPE) was $53,035 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,541 Mil.
Selling, General & Admin. Expense(SGA) was $469 Mil.
Total Current Liabilities was $4,307 Mil.
Long-Term Debt was $10,902 Mil.
Net Income was -1330 + 505 + 236 + 174 = $-415 Mil.
Non Operating Income was -2 + -1 + -2 + 6 = $1 Mil.
Cash Flow from Operations was 1896 + 2339 + 2293 + 2477 = $9,005 Mil.
Accounts Receivable was $3,086 Mil.
Revenue was 3900 + 4268 + 3946 + 4391 = $16,505 Mil.
Gross Profit was 3047 + 3410 + 3151 + 3533 = $13,141 Mil.
Total Current Assets was $6,016 Mil.
Total Assets was $60,239 Mil.
Property, Plant and Equipment(Net PPE) was $51,462 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,065 Mil.
Selling, General & Admin. Expense(SGA) was $505 Mil.
Total Current Liabilities was $4,523 Mil.
Long-Term Debt was $10,868 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)
=(2287 / 14839) / (3086 / 16505)
=0.1541209 / 0.18697364
=0.8243

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)
=(2805 / 16505) / (3021 / 14839)
=0.79618297 / 0.80376036
=0.9906

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 - (4426 + 53035) / 60990) / (1 - (6016 + 51462) / 60239)
=0.05786194 / 0.04583409
=1.2624

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
=14839 / 16505
=0.8991

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))
=(6065 / (6065 + 51462)) / (7541 / (7541 + 53035))
=0.10542876 / 0.12448825
=0.8469

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)
=(469 / 14839) / (505 / 16505)
=0.0316059 / 0.03059679
=1.033

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)
=((10902 + 4307) / 60990) / ((10868 + 4523) / 60239)
=0.24936875 / 0.25549893
=0.976

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
=(-415 - 1 - 9005) / 60990
=-0.1545

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 -3.37 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 1.15551.08081.0740.95050.56331.63850.98341.03310.99111.0176
GMI 0.99530.96811.03451.00120.83081.24910.96730.98671.02441.0219
AQI 0.91430.87311.17451.17141.17130.93161.66590.83711.18791.1256
SGI 1.27261.42221.06461.23381.24370.69531.40361.39661.01130.94
DEPI 1.07391.04410.99150.92120.34491.3312.480.88310.71921.0388
SGAI 0.98250.80491.00121.05490.84421.71310.7870.86491.1441.0077
LVGI 0.98510.90981.05590.97191.0771.03741.0270.84351.23220.8384
TATA -0.0932-0.0925-0.0784-0.098-0.2177-0.16-0.0851-0.1031-0.1071-0.1234
M-score -2.55-2.46-2.65-2.71-3.78-2.91-2.08-2.59-3.02-2.98

Apache Corporation Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.90331.09690.99111.04221.13321.06711.01760.83380.92430.8243
GMI 0.99131.00851.02441.04061.03481.02331.02191.0041.00080.9906
AQI 1.10921.18691.18790.93211.02451.03591.12561.10661.33611.2624
SGI 1.16471.05981.01130.94220.97960.97180.940.95720.89360.8991
DEPI 0.80180.7410.71920.8991.07081.12361.03880.98620.86980.8469
SGAI 1.02061.08921.1441.15071.03091.00711.00571.03251.04871.033
LVGI 1.01181.19961.23221.20961.06590.93560.83840.8320.84510.976
TATA -0.1167-0.1135-0.1069-0.1167-0.1026-0.1117-0.1237-0.1269-0.1286-0.1545
M-score -2.96-2.90-3.02-3.15-2.85-2.91-2.98-3.17-3.08-3.37
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