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Air Products & Chemicals Inc (NYSE:APD)
Beneish M-Score
-3.09 (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.

Air Products & Chemicals Inc has a M-score of -3.09 suggests that the company is not a manipulator.

APD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.23   Max: -2.41
Current: -3.09

-3.23
-2.41

During the past 13 years, the highest Beneish M-Score of Air Products & Chemicals Inc was -2.41. The lowest was -3.23. 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 Air Products & Chemicals Inc 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 * 1.0712+0.528 * 0.8943+0.404 * 1.0475+0.892 * 0.928+0.115 * 0.9668
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9118+4.679 * -0.1246-0.327 * 1.0159
=-3.09

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,373 Mil.
Revenue was 2271.2 + 2355.8 + 2449.4 + 2470.2 = $9,547 Mil.
Gross Profit was 752.2 + 757.8 + 752.3 + 753.8 = $3,016 Mil.
Total Current Assets was $3,031 Mil.
Total Assets was $16,811 Mil.
Property, Plant and Equipment(Net PPE) was $8,854 Mil.
Depreciation, Depletion and Amortization(DDA) was $932 Mil.
Selling, General & Admin. Expense(SGA) was $873 Mil.
Total Current Liabilities was $3,839 Mil.
Long-Term Debt was $3,573 Mil.
Net Income was -473.3 + 363.6 + 344.5 + 318.8 = $554 Mil.
Non Operating Income was 32.5 + 55.9 + -16.4 + 42.4 = $114 Mil.
Cash Flow from Operations was 488.9 + 573.5 + 779.9 + 690.7 = $2,533 Mil.
Accounts Receivable was $1,381 Mil.
Revenue was 2414.5 + 2560.8 + 2677 + 2634.6 = $10,287 Mil.
Gross Profit was 716.3 + 729.8 + 744.6 + 715.9 = $2,907 Mil.
Total Current Assets was $3,115 Mil.
Total Assets was $17,494 Mil.
Property, Plant and Equipment(Net PPE) was $9,486 Mil.
Depreciation, Depletion and Amortization(DDA) was $962 Mil.
Selling, General & Admin. Expense(SGA) was $1,032 Mil.
Total Current Liabilities was $3,081 Mil.
Long-Term Debt was $4,512 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)
=(1373.3 / 9546.6) / (1381.4 / 10286.9)
=0.14385226 / 0.1342873
=1.0712

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)
=(757.8 / 10286.9) / (752.2 / 9546.6)
=0.28255354 / 0.31593447
=0.8943

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 - (3031.2 + 8854.1) / 16810.8) / (1 - (3114.5 + 9485.9) / 17493.8)
=0.29299617 / 0.27972196
=1.0475

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
=9546.6 / 10286.9
=0.928

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))
=(962.4 / (962.4 + 9485.9)) / (932.4 / (932.4 + 8854.1))
=0.09211068 / 0.0952741
=0.9668

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)
=(872.9 / 9546.6) / (1031.6 / 10286.9)
=0.09143569 / 0.10028288
=0.9118

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)
=((3573.2 + 3839.1) / 16810.8) / ((4511.5 + 3081.3) / 17493.8)
=0.44092488 / 0.43402806
=1.0159

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
=(553.6 - 114.4 - 2533) / 16810.8
=-0.1246

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.

Air Products & Chemicals Inc has a M-score of -3.09 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.

Air Products & Chemicals Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 1.06350.86730.87661.09160.99440.85731.14180.94390.93840.9983
GMI 1.04440.97311.02460.97440.95941.050.99961.00110.99030.9009
AQI 1.03181.14960.9790.98451.04051.07151.14960.97630.91451.0068
SGI 1.12671.04521.13840.79281.09321.07180.99361.05921.02540.9479
DEPI 0.98850.97650.97181.0641.00041.05351.11841.00861.00621.0301
SGAI 0.94130.88980.98461.40950.70730.90731.01191.08570.95370.954
LVGI 1.07421.03581.06821.04770.91581.00360.97871.08090.94380.9946
TATA -0.0653-0.0449-0.0728-0.0622-0.0459-0.0448-0.0444-0.0407-0.0757-0.0744
M-score -2.59-2.72-2.83-2.97-2.54-2.68-2.48-2.72-2.88-2.91

Air Products & Chemicals Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.00361.03430.98360.93840.89070.85390.91340.99830.97191.0712
GMI 0.99271.00640.98670.99030.98210.93790.9180.90040.88780.8943
AQI 0.98640.95830.96430.91450.91440.9390.93111.00681.01581.0475
SGI 1.03161.02691.01461.02541.02861.00250.97820.94790.92690.928
DEPI 1.00121.03591.05251.00621.00990.98150.99271.03011.02510.9668
SGAI 1.08531.05561.02760.95370.91980.93690.93340.95340.94840.9118
LVGI 0.98190.98760.9670.94380.96450.96210.97290.99460.98081.0159
TATA -0.0544-0.0633-0.0664-0.0757-0.0729-0.0734-0.0798-0.074-0.0766-0.1246
M-score -2.72-2.74-2.80-2.88-2.91-2.99-3.00-2.91-2.96-3.09
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