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Apache Corporation (NYSE:APA)
Beneish M-Score
-3.17 (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 -3.17 suggests that the company is not a manipulator.

APA' s 10-Year Beneish M-Score Range
Min: -4.42   Max: -0.6
Current: -3.17

-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 -2.70.


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 * 0.8407+0.528 * 1.0022+0.404 * 1.1066+0.892 * 0.9494+0.115 * 0.9862
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0349+4.679 * -0.1268-0.327 * 0.832
=-3.17

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $2,479 Mil.
Revenue was 3675 + 3576 + 4019 + 4383 = $15,653 Mil.
Gross Profit was 3008 + 2879 + 3117 + 3474 = $12,478 Mil.
Total Current Assets was $5,463 Mil.
Total Assets was $61,121 Mil.
Property, Plant and Equipment(Net PPE) was $52,752 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,594 Mil.
Selling, General & Admin. Expense(SGA) was $506 Mil.
Total Current Liabilities was $4,356 Mil.
Long-Term Debt was $9,673 Mil.
Net Income was 236 + 174 + 306 + 1035 = $1,751 Mil.
Non Operating Income was -2 + 0 + 0 + -2 = $-4 Mil.
Cash Flow from Operations was 2293 + 2477 + 1978 + 2759 = $9,507 Mil.
Accounts Receivable was $3,106 Mil.
Revenue was 3946 + 4391 + 4179 + 3972 = $16,488 Mil.
Gross Profit was 3151 + 3533 + 3292 + 3196 = $13,172 Mil.
Total Current Assets was $4,848 Mil.
Total Assets was $61,792 Mil.
Property, Plant and Equipment(Net PPE) was $54,289 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,681 Mil.
Selling, General & Admin. Expense(SGA) was $515 Mil.
Total Current Liabilities was $5,562 Mil.
Long-Term Debt was $11,485 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)
=(2479 / 15653) / (3106 / 16488)
=0.1583722 / 0.18837943
=0.8407

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)
=(2879 / 16488) / (3008 / 15653)
=0.79888404 / 0.79716348
=1.0022

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 - (5463 + 52752) / 61121) / (1 - (4848 + 54289) / 61792)
=0.04754503 / 0.04296673
=1.1066

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
=15653 / 16488
=0.9494

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))
=(6681 / (6681 + 54289)) / (6594 / (6594 + 52752))
=0.10957848 / 0.11111111
=0.9862

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)
=(506 / 15653) / (515 / 16488)
=0.03232607 / 0.03123484
=1.0349

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)
=((9673 + 4356) / 61121) / ((11485 + 5562) / 61792)
=0.22952831 / 0.27587714
=0.832

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
=(1751 - -4 - 9507) / 61121
=-0.1268

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 -3.17 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.03310.96870.90331.09690.99111.04221.12551.05211.02590.8407
GMI 0.98670.9840.99131.00851.02441.04061.03691.02731.021.0022
AQI 0.83711.1371.10921.18691.18790.93211.02451.03591.12561.1066
SGI 1.39661.31141.16471.05981.01130.94220.98630.98560.93240.9494
DEPI 0.88310.80870.80180.7410.71920.8991.04351.06811.03880.9862
SGAI 0.86490.89441.02061.08921.1441.15071.0381.02051.00781.0349
LVGI 0.84350.84661.01181.19961.23221.20961.06590.93560.83840.832
TATA -0.1032-0.1076-0.1167-0.1135-0.1069-0.1167-0.1026-0.1117-0.1236-0.1268
M-score -2.59-2.64-2.96-2.90-3.02-3.15-2.85-2.91-2.98-3.17
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