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Air Products & Chemicals Inc (NYSE:APD)
Beneish M-Score
-3.01 (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 -3.01 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: -3.01

-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 * 1.1547+0.528 * 0.9064+0.404 * 1.0467+0.892 * 0.9396+0.115 * 0.937
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8959+4.679 * -0.1268-0.327 * 1.031
=-3.01

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,563 Mil.
Revenue was 2434.4 + 2271.2 + 2355.8 + 2449.4 = $9,511 Mil.
Gross Profit was 795.1 + 752.2 + 757.8 + 748.4 = $3,054 Mil.
Total Current Assets was $3,379 Mil.
Total Assets was $17,084 Mil.
Property, Plant and Equipment(Net PPE) was $8,799 Mil.
Depreciation, Depletion and Amortization(DDA) was $930 Mil.
Selling, General & Admin. Expense(SGA) was $844 Mil.
Total Current Liabilities was $3,659 Mil.
Long-Term Debt was $3,926 Mil.
Net Income was 346.8 + -473.3 + 363.6 + 344.5 = $582 Mil.
Non Operating Income was 42.4 + 32.5 + 55.9 + 19.4 = $150 Mil.
Cash Flow from Operations was 746.8 + 514 + 573.5 + 763.3 = $2,598 Mil.
Accounts Receivable was $1,441 Mil.
Revenue was 2470.2 + 2414.5 + 2560.8 + 2677 = $10,123 Mil.
Gross Profit was 755 + 716.3 + 729.8 + 744.6 = $2,946 Mil.
Total Current Assets was $3,102 Mil.
Total Assets was $17,672 Mil.
Property, Plant and Equipment(Net PPE) was $9,721 Mil.
Depreciation, Depletion and Amortization(DDA) was $956 Mil.
Selling, General & Admin. Expense(SGA) was $1,003 Mil.
Total Current Liabilities was $2,919 Mil.
Long-Term Debt was $4,691 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)
=(1563.2 / 9510.8) / (1440.8 / 10122.5)
=0.16436052 / 0.14233638
=1.1547

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)
=(2945.7 / 10122.5) / (3053.5 / 9510.8)
=0.29100519 / 0.32105606
=0.9064

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 - (3378.8 + 8798.6) / 17083.5) / (1 - (3102.3 + 9720.8) / 17671.5)
=0.28718354 / 0.27436267
=1.0467

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
=9510.8 / 10122.5
=0.9396

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))
=(956.4 / (956.4 + 9720.8)) / (930 / (930 + 8798.6))
=0.08957405 / 0.09559443
=0.937

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)
=(844 / 9510.8) / (1002.7 / 10122.5)
=0.08874122 / 0.09905656
=0.8959

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)
=((3925.6 + 3658.9) / 17083.5) / ((4690.5 + 2918.9) / 17671.5)
=0.4439664 / 0.43060295
=1.031

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
=(581.6 - 150.2 - 2597.6) / 17083.5
=-0.1268

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 -3.01 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.03430.98360.93840.89070.85390.91340.99830.97191.07121.1547
GMI 1.00640.98670.99030.98210.93790.91760.90120.88860.89510.9064
AQI 0.95830.96430.91450.91440.9390.93111.00681.01581.04751.0467
SGI 1.02691.01461.02541.02861.00250.97820.94790.92690.9280.9396
DEPI 1.03591.05251.00621.00990.98150.99271.03011.02510.96680.937
SGAI 1.05561.02760.95370.91980.93690.93270.95460.94970.9130.8959
LVGI 0.98760.9670.94380.96450.96210.97290.99460.98081.01591.031
TATA -0.0633-0.0664-0.0757-0.0729-0.0745-0.0807-0.0761-0.0787-0.127-0.1268
M-score -2.74-2.80-2.88-2.91-3.00-3.01-2.92-2.97-3.10-3.01
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