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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.
During the past 12 years, the highest Beneish M-Score of American Public Education Inc was 0.34. The lowest was -3.34. And the median was -3.03.
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 American Public Education 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 * 0.6061||+||0.528 * 1.0175||+||0.404 * 0.84||+||0.892 * 1.0623||+||0.115 * 0.9529|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0006||+||4.679 * -0.0676||-||0.327 * 0.8109|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $6.1 Mil.|
Revenue was 91.297 + 84.707 + 85.463 + 88.553 = $350.0 Mil.
Gross Profit was 59.703 + 54.081 + 55.266 + 57.205 = $226.3 Mil.
Total Current Assets was $136.2 Mil.
Total Assets was $297.9 Mil.
Property, Plant and Equipment(Net PPE) was $102.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.1 Mil.
Selling, General & Admin. Expense(SGA) was $144.3 Mil.
Total Current Liabilities was $48.3 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 11.797 + 8.842 + 9.802 + 10.436 = $40.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 13.86 + 24.945 + 9.776 + 12.449 = $61.0 Mil.
|Accounts Receivable was $9.5 Mil.
Revenue was 82.937 + 81.777 + 80.925 + 83.84 = $329.5 Mil.
Gross Profit was 53.904 + 53.638 + 53.718 + 55.435 = $216.7 Mil.
Total Current Assets was $116.6 Mil.
Total Assets was $271.7 Mil.
Property, Plant and Equipment(Net PPE) was $90.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $135.8 Mil.
Total Current Liabilities was $54.3 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(6.13 / 350.02)||/||(9.52 / 329.479)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(54.081 / 329.479)||/||(59.703 / 350.02)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (136.218 + 102.424) / 297.904)||/||(1 - (116.585 + 90.733) / 271.655)|
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.
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))|
|=||(13.508 / (13.508 + 90.733))||/||(16.121 / (16.121 + 102.424))|
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)|
|=||(144.302 / 350.02)||/||(135.75 / 329.479)|
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)|
|=||((0 + 48.25) / 297.904)||/||((0 + 54.258) / 271.655)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(40.877 - 0||-||61.03)||/||297.904|
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.
American Public Education Inc has a M-score of -3.10 suggests that the company will not be a manipulator.
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
American Public Education Inc Annual Data
American Public Education Inc Quarterly Data