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Air Products & Chemicals Inc (NYSE:APD)
Beneish M-Score
-2.91 (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 -2.91 suggests that the company is not a manipulator.

APD' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -2.4
Current: -2.91

-3.22
-2.4

During the past 13 years, the highest Beneish M-Score of Air Products & Chemicals Inc was -2.40. The lowest was -3.22. And the median was -2.71.


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 * 0.8907+0.528 * 0.9821+0.404 * 0.9144+0.892 * 1.0286+0.115 * 1.0099
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9198+4.679 * -0.0713-0.327 * 0.9645
=-2.91

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,430 Mil.
Revenue was 2560.8 + 2677 + 2634.6 + 2581.9 = $10,454 Mil.
Gross Profit was 729.8 + 744.6 + 715.9 + 664.3 = $2,855 Mil.
Total Current Assets was $3,137 Mil.
Total Assets was $17,635 Mil.
Property, Plant and Equipment(Net PPE) was $9,608 Mil.
Depreciation, Depletion and Amortization(DDA) was $958 Mil.
Selling, General & Admin. Expense(SGA) was $1,042 Mil.
Total Current Liabilities was $3,002 Mil.
Long-Term Debt was $4,751 Mil.
Net Income was 324.6 + 104 + 314 + 283.5 = $1,026 Mil.
Non Operating Income was 43.1 + 39.7 + 43.1 + 30.4 = $156 Mil.
Cash Flow from Operations was 486.6 + 602.4 + 559.3 + 478.5 = $2,127 Mil.
Accounts Receivable was $1,561 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.



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)
=(1430.4 / 10454.3) / (1561.2 / 10163.5)
=0.13682408 / 0.1536085
=0.8907

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)
=(744.6 / 10163.5) / (729.8 / 10454.3)
=0.26817533 / 0.27305511
=0.9821

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 - (3137.2 + 9607.6) / 17635.4) / (1 - (3330.1 + 9152) / 17915.2)
=0.27731721 / 0.30326762
=0.9144

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
=10454.3 / 10163.5
=1.0286

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))
=(922.7 / (922.7 + 9152)) / (958.2 / (958.2 + 9607.6))
=0.09158585 / 0.09068883
=1.0099

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)
=(1042.1 / 10454.3) / (1101.5 / 10163.5)
=0.09968147 / 0.10837802
=0.9198

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)
=((4751.3 + 3001.9) / 17635.4) / ((5020.8 + 3145.2) / 17915.2)
=0.43963845 / 0.45581406
=0.9645

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
=(1026.1 - 156.3 - 2126.8) / 17635.4
=-0.0713

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 -2.91 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 0.90431.06350.86730.87661.09160.99440.85731.14180.94390.9384
GMI 1.01241.04440.97311.02460.97440.95941.050.99961.00110.9903
AQI 1.11281.03181.14960.9790.98451.04051.07151.14960.97630.9145
SGI 1.10471.12671.04521.13840.79281.09321.07180.99361.05921.0254
DEPI 1.00030.98850.97650.97181.0641.00041.05351.11841.00861.0062
SGAI 0.95950.94130.88980.98461.40950.70730.90731.01191.08570.9537
LVGI 1.00771.07421.03581.06821.04770.91581.00360.97871.08090.9438
TATA -0.0766-0.0655-0.0501-0.0728-0.0622-0.0459-0.0448-0.0444-0.0407-0.0757
M-score -2.78-2.59-2.75-2.83-2.97-2.54-2.68-2.48-2.72-2.88

Air Products & Chemicals Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.15350.97091.06121.06240.94391.00361.03430.98360.93840.8907
GMI 1.00810.98790.98191.00881.00110.99271.00640.98670.99030.9821
AQI 1.14961.19941.17161.09840.97630.98640.95830.96430.91450.9144
SGI 0.98351.01541.03611.07231.05921.03161.02691.01461.02541.0286
DEPI 1.11841.07121.04261.03561.00861.00121.03591.05251.00621.0099
SGAI 1.00291.0241.03861.04871.08591.08531.05561.02760.95370.9198
LVGI 0.97871.07381.06421.14841.08090.98190.98760.9670.94380.9645
TATA -0.0444-0.0336-0.035-0.0424-0.0407-0.0544-0.0632-0.0663-0.0757-0.0713
M-score -2.48-2.60-2.52-2.56-2.72-2.72-2.74-2.80-2.88-2.91
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