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Air Products & Chemicals Inc (NYSE:APD)
Beneish M-Score
-2.73 (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 -2.80 suggests that the company is not a manipulator.

APD' s 10-Year Beneish M-Score Range
Min: -3.14   Max: -2.43
Current: -2.73

-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 -2.70.


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 * 0.983+0.528 * 0.9867+0.404 * 0.9643+0.892 * 1.0146+0.115 * 1.0525
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0276+4.679 * -0.0663-0.327 * 0.967
=-2.80

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,039 Mil.
Revenue was 2634.6 + 2581.9 + 2545.5 + 2586.5 = $10,349 Mil.
Gross Profit was 715.9 + 664.3 + 679.6 + 703.6 = $2,763 Mil.
Total Current Assets was $3,340 Mil.
Total Assets was $18,316 Mil.
Property, Plant and Equipment(Net PPE) was $9,579 Mil.
Depreciation, Depletion and Amortization(DDA) was $935 Mil.
Selling, General & Admin. Expense(SGA) was $1,099 Mil.
Total Current Liabilities was $3,156 Mil.
Long-Term Debt was $4,951 Mil.
Net Income was 314 + 283.5 + 290.2 + 137.1 = $1,025 Mil.
Non Operating Income was 43.1 + 30.4 + 38.2 + 42.4 = $154 Mil.
Cash Flow from Operations was 559.3 + 477.8 + 546.9 + 501.9 = $2,086 Mil.
Accounts Receivable was $2,044 Mil.
Revenue was 2547.3 + 2484.2 + 2562.4 + 2605.8 = $10,200 Mil.
Gross Profit was 671.8 + 670.6 + 662.3 + 682.8 = $2,688 Mil.
Total Current Assets was $3,481 Mil.
Total Assets was $17,491 Mil.
Property, Plant and Equipment(Net PPE) was $8,666 Mil.
Depreciation, Depletion and Amortization(DDA) was $895 Mil.
Selling, General & Admin. Expense(SGA) was $1,054 Mil.
Total Current Liabilities was $3,358 Mil.
Long-Term Debt was $4,648 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)
=(2038.9 / 10348.5) / (2044.3 / 10199.7)
=0.19702372 / 0.20042746
=0.983

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)
=(664.3 / 10199.7) / (715.9 / 10348.5)
=0.26348814 / 0.26703387
=0.9867

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 - (3339.8 + 9579.1) / 18316.2) / (1 - (3480.7 + 8665.7) / 17491.3)
=0.29467357 / 0.30557477
=0.9643

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
=10348.5 / 10199.7
=1.0146

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))
=(894.7 / (894.7 + 8665.7)) / (934.9 / (934.9 + 9579.1))
=0.09358395 / 0.08891954
=1.0525

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)
=(1099 / 10348.5) / (1054.1 / 10199.7)
=0.10619897 / 0.10334618
=1.0276

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)
=((4951 + 3156.1) / 18316.2) / ((4648.2 + 3357.7) / 17491.3)
=0.4426191 / 0.45770755
=0.967

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
=(1024.8 - 154.1 - 2085.9) / 18316.2
=-0.0663

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 -2.80 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.9130.88661.08671.03541.04871.10920.97480.99961.04420.983
GMI 1.06611.02831.00810.98790.98191.00881.00110.99271.00640.9867
AQI 1.0531.10121.14961.19941.17161.09840.97630.98640.95830.9643
SGI 1.02620.9890.98351.01541.03611.07231.05921.03161.02691.0146
DEPI 1.05361.03871.11841.07121.04261.03561.00861.00121.03591.0525
SGAI 0.94540.98991.00291.0241.03861.04871.08591.08531.05561.0276
LVGI 1.00150.93530.97871.07381.06421.14841.08090.98190.98760.967
TATA -0.0526-0.0432-0.0444-0.0336-0.035-0.0424-0.0407-0.0544-0.0632-0.0663
M-score -2.71-2.71-2.54-2.54-2.53-2.52-2.69-2.72-2.73-2.80
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