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Air Products & Chemicals Inc (NYSE:APD)
Beneish M-Score
-2.88 (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 -2.88 suggests that the company is not a manipulator.

APD' s 10-Year Beneish M-Score Range
Min: -3.01   Max: -2.44
Current: -2.88

-3.01
-2.44

During the past 13 years, the highest Beneish M-Score of Air Products & Chemicals Inc was -2.44. The lowest was -3.01. And the median was -2.74.


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 * 0.9384+0.528 * 0.9903+0.404 * 0.9145+0.892 * 1.0254+0.115 * 1.0062
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9537+4.679 * -0.0757-0.327 * 0.9438
=-2.88

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,486 Mil.
Revenue was 2677 + 2634.6 + 2581.9 + 2545.5 = $10,439 Mil.
Gross Profit was 744.6 + 715.9 + 664.3 + 679.6 = $2,804 Mil.
Total Current Assets was $3,295 Mil.
Total Assets was $17,779 Mil.
Property, Plant and Equipment(Net PPE) was $9,532 Mil.
Depreciation, Depletion and Amortization(DDA) was $957 Mil.
Selling, General & Admin. Expense(SGA) was $1,065 Mil.
Total Current Liabilities was $2,963 Mil.
Long-Term Debt was $4,825 Mil.
Net Income was 104 + 314 + 283.5 + 290.2 = $992 Mil.
Non Operating Income was 39.7 + 43.1 + 30.4 + 38.2 = $151 Mil.
Cash Flow from Operations was 602.4 + 559.3 + 477.8 + 546.9 = $2,186 Mil.
Accounts Receivable was $1,544 Mil.
Revenue was 2586.5 + 2547.3 + 2484.2 + 2562.4 = $10,180 Mil.
Gross Profit was 703.6 + 671.8 + 670.6 + 662.3 = $2,708 Mil.
Total Current Assets was $3,439 Mil.
Total Assets was $17,850 Mil.
Property, Plant and Equipment(Net PPE) was $8,974 Mil.
Depreciation, Depletion and Amortization(DDA) was $907 Mil.
Selling, General & Admin. Expense(SGA) was $1,089 Mil.
Total Current Liabilities was $3,228 Mil.
Long-Term Debt was $5,056 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)
=(1486 / 10439) / (1544.3 / 10180.4)
=0.1423508 / 0.15169345
=0.9384

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)
=(715.9 / 10180.4) / (744.6 / 10439)
=0.2660308 / 0.26864642
=0.9903

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 - (3294.8 + 9532.1) / 17779.1) / (1 - (3439.1 + 8974) / 17850.1)
=0.27854053 / 0.30459213
=0.9145

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
=10439 / 10180.4
=1.0254

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))
=(907 / (907 + 8974)) / (956.9 / (956.9 + 9532.1))
=0.09179233 / 0.09122891
=1.0062

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)
=(1064.8 / 10439) / (1088.8 / 10180.4)
=0.10200211 / 0.10695061
=0.9537

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)
=((4824.5 + 2963) / 17779.1) / ((5056.3 + 3227.6) / 17850.1)
=0.4380143 / 0.46408143
=0.9438

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
=(991.7 - 151.4 - 2186.4) / 17779.1
=-0.0757

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 -2.88 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

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.90431.06350.86730.87661.09160.99440.95151.02880.94390.9384
GMI 1.01241.04440.97311.02460.97440.95941.01861.03041.00110.9903
AQI 1.11281.03181.14960.9790.98451.04051.01921.20860.97630.9145
SGI 1.10471.12671.04521.13840.79281.09321.1170.95341.05921.0254
DEPI 1.00030.98850.97650.97181.0641.00041.03431.13921.00861.0062
SGAI 0.95950.94130.88980.98461.43450.6950.93780.9791.08570.9537
LVGI 1.00771.07421.03581.06821.04770.91581.00360.97871.08090.9438
TATA -0.0766-0.0655-0.0501-0.0728-0.0617-0.0459-0.0478-0.0444-0.0407-0.0757
M-score -2.78-2.59-2.75-2.83-2.97-2.54-2.61-2.58-2.72-2.88

Air Products & Chemicals Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.86891.0181.0121.09561.08550.95391.00361.03430.98360.9384
GMI 1.02511.02151.01931.0071.02611.00980.99271.00640.98670.9903
AQI 1.10121.20861.19941.17161.09840.97630.98640.95830.96430.9145
SGI 0.98950.96340.97421.00361.04951.04811.03161.02691.01461.0254
DEPI 1.06011.13921.14021.06511.04681.00860.99111.03591.05251.0062
SGAI 1.07940.9870.99140.8520.86881.0771.08531.15451.11980.9537
LVGI 0.93530.97871.07381.06421.14841.08090.98190.98760.9670.9438
TATA -0.0482-0.0444-0.033-0.0338-0.0405-0.0407-0.0547-0.0632-0.0663-0.0757
M-score -2.77-2.58-2.56-2.46-2.51-2.71-2.72-2.75-2.82-2.88
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