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Apache Corporation (NYSE:APA)
Beneish M-Score
-6.11 (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 -6.11 suggests that the company is not a manipulator.

APA' s 10-Year Beneish M-Score Range
Min: -6.11   Max: -0.6
Current: -6.11

-6.11
-0.6

During the past 13 years, the highest Beneish M-Score of Apache Corporation was -0.60. The lowest was -6.11. 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 * 0.9008+0.528 * 1.059+0.404 * 0.7288+0.892 * 0.7328+0.115 * 0.2328
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2694+4.679 * -0.6276-0.327 * 1.4666
=-6.11

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,589 Mil.
Revenue was 1977 + 1818 + 2952 + 3740 = $10,487 Mil.
Gross Profit was 1461 + 1224 + 2265 + 3021 = $7,971 Mil.
Total Current Assets was $5,493 Mil.
Total Assets was $35,312 Mil.
Property, Plant and Equipment(Net PPE) was $28,315 Mil.
Depreciation, Depletion and Amortization(DDA) was $22,824 Mil.
Selling, General & Admin. Expense(SGA) was $427 Mil.
Total Current Liabilities was $2,383 Mil.
Long-Term Debt was $9,676 Mil.
Net Income was -5600 + -4651 + -4814 + -1330 = $-16,395 Mil.
Non Operating Income was -2 + -2 + 11 + -2 = $5 Mil.
Cash Flow from Operations was 1283 + 650 + 1933 + 1896 = $5,762 Mil.
Accounts Receivable was $2,407 Mil.
Revenue was 3289 + 3675 + 3446 + 3900 = $14,310 Mil.
Gross Profit was 2663 + 3008 + 2800 + 3047 = $11,518 Mil.
Total Current Assets was $5,126 Mil.
Total Assets was $61,171 Mil.
Property, Plant and Equipment(Net PPE) was $52,470 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,085 Mil.
Selling, General & Admin. Expense(SGA) was $459 Mil.
Total Current Liabilities was $4,570 Mil.
Long-Term Debt was $9,674 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)
=(1589 / 10487) / (2407 / 14310)
=0.15152093 / 0.16820405
=0.9008

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)
=(1224 / 14310) / (1461 / 10487)
=0.80489168 / 0.76008391
=1.059

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 - (5493 + 28315) / 35312) / (1 - (5126 + 52470) / 61171)
=0.04259175 / 0.05844273
=0.7288

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
=10487 / 14310
=0.7328

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))
=(6085 / (6085 + 52470)) / (22824 / (22824 + 28315))
=0.10391939 / 0.44631299
=0.2328

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)
=(427 / 10487) / (459 / 14310)
=0.04071708 / 0.03207547
=1.2694

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)
=((9676 + 2383) / 35312) / ((9674 + 4570) / 61171)
=0.34149864 / 0.23285544
=1.4666

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
=(-16395 - 5 - 5762) / 35312
=-0.6276

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 -6.11 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

Apache Corporation Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.04221.13321.06711.04990.86070.96880.86440.78120.92360.9008
GMI 1.04061.03481.02331.01380.99590.99090.98030.99391.03191.059
AQI 0.93211.02451.03591.12561.10661.33611.26240.56470.65450.7288
SGI 0.94220.97960.97180.91110.92730.85260.85730.87760.77170.7328
DEPI 0.8991.07081.12361.0991.04450.94780.88960.61410.35410.2328
SGAI 1.15071.03091.00710.99420.98841.05771.04171.07311.17771.2694
LVGI 1.20961.06590.93560.83840.8320.84510.9761.14281.35831.4666
TATA -0.1167-0.1026-0.1117-0.124-0.1272-0.1289-0.1548-0.2479-0.3518-0.6276
M-score -3.15-2.85-2.91-2.97-3.17-3.08-3.37-4.23-4.74-6.11
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