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Apache Corporation (NYSE:APA)
Beneish M-Score
-2.98 (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 Corporation has a M-score of -2.98 suggests that the company is not a manipulator.

APA' s 10-Year Beneish M-Score Range
Min: -3.81   Max: -1.55
Current: -2.98

-3.81
-1.55

During the past 13 years, the highest Beneish M-Score of Apache Corporation was -1.55. The lowest was -3.81. And the median was -2.71.


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 * 1.0176+0.528 * 1.0219+0.404 * 1.1256+0.892 * 0.94+0.115 * 1.0388
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0077+4.679 * -0.1233-0.327 * 0.8384
=-2.98

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $2,952 Mil.
Revenue was 3576 + 4019 + 4383 + 4076 = $16,054 Mil.
Gross Profit was 2879 + 3117 + 3474 + 3231 = $12,701 Mil.
Total Current Assets was $6,366 Mil.
Total Assets was $61,637 Mil.
Property, Plant and Equipment(Net PPE) was $52,421 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,700 Mil.
Selling, General & Admin. Expense(SGA) was $503 Mil.
Total Current Liabilities was $4,700 Mil.
Long-Term Debt was $9,672 Mil.
Net Income was 174 + 306 + 1035 + 717 = $2,232 Mil.
Non Operating Income was 0 + 0 + -2 + 0 = $-2 Mil.
Cash Flow from Operations was 2477 + 1978 + 2759 + 2621 = $9,835 Mil.
Accounts Receivable was $3,086 Mil.
Revenue was 4391 + 4179 + 3972 + 4536 = $17,078 Mil.
Gross Profit was 3533 + 3292 + 3196 + 3786 = $13,807 Mil.
Total Current Assets was $4,962 Mil.
Total Assets was $60,737 Mil.
Property, Plant and Equipment(Net PPE) was $53,280 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,109 Mil.
Selling, General & Admin. Expense(SGA) was $531 Mil.
Total Current Liabilities was $5,536 Mil.
Long-Term Debt was $11,355 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)
=(2952 / 16054) / (3086 / 17078)
=0.18387941 / 0.18070032
=1.0176

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)
=(3117 / 17078) / (2879 / 16054)
=0.80846703 / 0.79114239
=1.0219

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 - (6366 + 52421) / 61637) / (1 - (4962 + 53280) / 60737)
=0.04623846 / 0.04107875
=1.1256

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
=16054 / 17078
=0.94

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))
=(7109 / (7109 + 53280)) / (6700 / (6700 + 52421))
=0.11772011 / 0.11332691
=1.0388

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)
=(503 / 16054) / (531 / 17078)
=0.03133176 / 0.03109263
=1.0077

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)
=((9672 + 4700) / 61637) / ((11355 + 5536) / 60737)
=0.23317163 / 0.27810066
=0.8384

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
=(2232 - -2 - 9835) / 61637
=-0.1233

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 -2.98 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 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.01961.03310.96870.90331.09690.99111.0341.11691.0441.0176
GMI 1.0030.98670.9840.99131.00851.02441.04251.03871.02911.0219
AQI 0.31780.83711.1371.10921.18691.18790.93211.02451.03591.1256
SGI 1.42911.39661.31141.16471.05981.01130.94970.99390.99320.94
DEPI 1.01420.88310.80870.80180.7410.71920.88451.04351.06811.0388
SGAI 0.90520.86490.89441.02061.08921.1441.15061.0381.02051.0077
LVGI 0.94380.84350.84661.01181.19961.23221.20961.06590.93560.8384
TATA -0.1057-0.1032-0.1076-0.1167-0.1136-0.1069-0.1164-0.1023-0.1114-0.1233
M-score -2.81-2.59-2.64-2.96-2.90-3.02-3.15-2.85-2.91-2.98
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