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Air Products & Chemicals Inc (NYSE:APD)
Beneish M-Score
-2.72 (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 -2.72 suggests that the company is not a manipulator.

APD' s 10-Year Beneish M-Score Range
Min: -3.14   Max: -2.43
Current: -2.72

-3.14
-2.43

During the past 13 years, the highest Beneish M-Score of Air Products & Chemicals Inc was -2.43. The lowest was -3.14. And the median was -2.68.


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 * 0.9996+0.528 * 0.9927+0.404 * 0.9864+0.892 * 1.0316+0.115 * 1.0012
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0853+4.679 * -0.0544-0.327 * 0.9819
=-2.72

* 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 $1,977 Mil.
Revenue was 2545.5 + 2586.5 + 2547.3 + 2484.2 = $10,164 Mil.
Gross Profit was 679.6 + 703.6 + 671.8 + 670.6 = $2,726 Mil.
Total Current Assets was $3,330 Mil.
Total Assets was $17,915 Mil.
Property, Plant and Equipment(Net PPE) was $9,152 Mil.
Depreciation, Depletion and Amortization(DDA) was $923 Mil.
Selling, General & Admin. Expense(SGA) was $1,102 Mil.
Total Current Liabilities was $3,145 Mil.
Long-Term Debt was $5,021 Mil.
Net Income was 290.2 + 137.1 + 288.4 + 290.4 = $1,006 Mil.
Non Operating Income was 38.2 + 42.4 + 44.2 + 39.8 = $165 Mil.
Cash Flow from Operations was 546.9 + 501.9 + 453 + 314.6 = $1,816 Mil.
Accounts Receivable was $1,918 Mil.
Revenue was 2562.4 + 2605.8 + 2340.1 + 2344.3 = $9,853 Mil.
Gross Profit was 662.3 + 682.8 + 649.3 + 628.5 = $2,623 Mil.
Total Current Assets was $3,563 Mil.
Total Assets was $17,393 Mil.
Property, Plant and Equipment(Net PPE) was $8,482 Mil.
Depreciation, Depletion and Amortization(DDA) was $856 Mil.
Selling, General & Admin. Expense(SGA) was $984 Mil.
Total Current Liabilities was $2,967 Mil.
Long-Term Debt was $5,107 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)
=(1977.4 / 10163.5) / (1917.7 / 9852.6)
=0.19455896 / 0.19463898
=0.9996

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)
=(703.6 / 9852.6) / (679.6 / 10163.5)
=0.26621399 / 0.26817533
=0.9927

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 - (3330.1 + 9152) / 17915.2) / (1 - (3563.1 + 8482.3) / 17393.1)
=0.30326762 / 0.307461
=0.9864

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
=10163.5 / 9852.6
=1.0316

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))
=(856.3 / (856.3 + 8482.3)) / (922.7 / (922.7 + 9152))
=0.09169469 / 0.09158585
=1.0012

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)
=(1101.5 / 10163.5) / (983.9 / 9852.6)
=0.10837802 / 0.09986197
=1.0853

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)
=((5020.8 + 3145.2) / 17915.2) / ((5107.3 + 2966.9) / 17393.1)
=0.45581406 / 0.46421857
=0.9819

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
=(1006.1 - 164.6 - 1816.4) / 17915.2
=-0.0544

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 -2.72 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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 1.07491.02161.02950.87090.92961.15880.95920.82071.07570.9748
GMI 0.97081.01241.04440.97311.02460.97440.95941.050.99961.0011
AQI 1.04981.11281.03181.14960.9790.98451.04051.07151.14960.9763
SGI 1.11671.10471.12671.04521.13840.79281.09321.07180.99361.0592
DEPI 0.95511.00030.98850.97650.97181.0641.00041.05351.11841.0086
SGAI 1.01630.95950.94130.88980.98461.40950.70730.90731.01191.0857
LVGI 0.9611.00771.07421.03581.06821.04770.91581.00360.97871.0809
TATA -0.0604-0.0766-0.0655-0.0501-0.0728-0.0622-0.0459-0.0448-0.0444-0.0407
M-score -2.58-2.67-2.63-2.74-2.78-2.91-2.58-2.71-2.55-2.69

Air Products & Chemicals Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.81240.95770.9130.88661.08671.03541.04871.10920.97480.9996
GMI 1.04121.06511.06611.02831.00810.98790.98191.00881.00110.9927
AQI 1.07151.00541.0531.10121.14961.19941.17161.09840.97630.9864
SGI 1.08271.04961.02620.9890.98351.01541.03611.07231.05921.0316
DEPI 1.05351.09651.05361.03871.11841.07121.04261.03561.00861.0012
SGAI 0.91540.93040.94540.98991.00291.0241.03861.04871.08591.0853
LVGI 1.00361.04761.00150.93530.97871.07381.06421.14841.08090.9819
TATA -0.0448-0.0527-0.0526-0.0432-0.0444-0.0336-0.035-0.0424-0.0407-0.0544
M-score -2.72-2.68-2.71-2.71-2.54-2.54-2.53-2.52-2.69-2.72
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