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Apache Corporation (NYSE:APA)
Beneish M-Score
-4.23 (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 -4.23 suggests that the company is not a manipulator.

APA' s 10-Year Beneish M-Score Range
Min: -4.23   Max: -1.62
Current: -4.23

-4.23
-1.62

During the past 13 years, the highest Beneish M-Score of Apache Corporation was -1.62. The lowest was -4.23. 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 * 0.7702+0.528 * 0.9952+0.404 * 0.5647+0.892 * 0.8902+0.115 * 0.6141
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.051+4.679 * -0.2479-0.327 * 1.1428
=-4.23

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,024 Mil.
Revenue was 2952 + 3740 + 3484 + 3675 = $13,851 Mil.
Gross Profit was 2265 + 3021 + 2805 + 3008 = $11,099 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 $10,158 Mil.
Selling, General & Admin. Expense(SGA) was $450 Mil.
Total Current Liabilities was $3,664 Mil.
Long-Term Debt was $11,245 Mil.
Net Income was -4814 + -1330 + 505 + 236 = $-5,403 Mil.
Non Operating Income was 11 + -2 + -1 + -2 = $6 Mil.
Cash Flow from Operations was 1933 + 1896 + 2339 + 2293 = $8,461 Mil.
Accounts Receivable was $2,952 Mil.
Revenue was 3446 + 3900 + 4268 + 3946 = $15,560 Mil.
Gross Profit was 2800 + 3047 + 3410 + 3151 = $12,408 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 $6,289 Mil.
Selling, General & Admin. Expense(SGA) was $481 Mil.
Total Current Liabilities was $4,700 Mil.
Long-Term Debt was $9,672 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)
=(2024 / 13851) / (2952 / 15560)
=0.14612663 / 0.18971722
=0.7702

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)
=(3021 / 15560) / (2265 / 13851)
=0.79742931 / 0.80131398
=0.9952

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 - (6415 + 48076) / 55952) / (1 - (6366 + 52421) / 61637)
=0.02611167 / 0.04623846
=0.5647

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
=13851 / 15560
=0.8902

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))
=(6289 / (6289 + 52421)) / (10158 / (10158 + 48076))
=0.10711974 / 0.17443418
=0.6141

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)
=(450 / 13851) / (481 / 15560)
=0.03248863 / 0.0309126
=1.051

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)
=((11245 + 3664) / 55952) / ((9672 + 4700) / 61637)
=0.26646054 / 0.23317163
=1.1428

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
=(-5403 - 6 - 8461) / 55952
=-0.2479

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 -4.23 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.08081.0740.95050.56331.63850.98341.03310.99111.04990.7702
GMI 0.96811.03451.00120.83081.24910.96730.98671.02441.01380.9952
AQI 0.87311.17451.17141.17130.93161.66590.83711.18791.12560.5647
SGI 1.42221.06461.23381.24370.69531.40361.39661.01130.91110.8902
DEPI 1.04410.99150.92120.34491.3312.480.88310.71921.0990.6141
SGAI 0.80491.00121.05490.84421.71310.7870.86491.1440.99631.0115
LVGI 0.90981.05590.97191.0771.03741.0270.84351.23220.83841.1428
TATA -0.0925-0.0784-0.098-0.2177-0.1598-0.0851-0.1031-0.1071-0.1237-0.2479
M-score -2.46-2.65-2.71-3.78-2.91-2.08-2.59-3.02-2.97-4.22

Apache Corporation Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.09690.99111.04221.13321.06711.04990.86070.95580.85270.7702
GMI 1.00851.02441.04061.03481.02331.01380.99590.99210.98170.9952
AQI 1.18691.18790.93211.02451.03591.12561.10661.33611.26240.5647
SGI 1.05981.01130.94220.97960.97180.91110.92730.86420.86910.8902
DEPI 0.7410.71920.8991.07081.12361.0991.04450.92020.88960.6141
SGAI 1.08921.1441.15071.03091.00710.99421.02191.03661.02071.051
LVGI 1.19961.23221.20961.06590.93560.83840.8320.84510.9761.1428
TATA -0.1135-0.1069-0.1167-0.1026-0.1117-0.124-0.1272-0.1289-0.1548-0.2479
M-score -2.90-3.02-3.15-2.85-2.91-2.97-3.17-3.08-3.37-4.23
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