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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 13 years, the highest Beneish M-Score of Apollo Education Group Inc was -0.67. The lowest was -3.93. And the median was -2.77.
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 Apollo Education Group 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 * 1.3064||+||0.528 * 1.0617||+||0.404 * 0.9075||+||0.892 * 0.8634||+||0.115 * 0.7757|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1099||+||4.679 * -0.054||-||0.327 * 0.9572|
|This Year (May15) TTM:||Last Year (May14) TTM:|
|Accounts Receivable was $207 Mil.|
Revenue was 681.481 + 578.572 + 719.052 + 709.666 = $2,689 Mil.
Gross Profit was 382.975 + 285.499 + 394.788 + 387.062 = $1,450 Mil.
Total Current Assets was $1,381 Mil.
Total Assets was $2,351 Mil.
Property, Plant and Equipment(Net PPE) was $400 Mil.
Depreciation, Depletion and Amortization(DDA) was $142 Mil.
Selling, General & Admin. Expense(SGA) was $1,027 Mil.
Total Current Liabilities was $838 Mil.
Long-Term Debt was $40 Mil.
Net Income was 48.064 + -33.61 + 33.785 + 29.783 = $78 Mil.
Non Operating Income was -2.039 + -1.146 + -1.285 + -1.177 = $-6 Mil.
Cash Flow from Operations was 68.59 + 36.814 + 18.299 + 86.901 = $211 Mil.
|Accounts Receivable was $183 Mil.
Revenue was 793.61 + 672.754 + 848.148 + 799.595 = $3,114 Mil.
Gross Profit was 468.989 + 356.177 + 510.946 + 447.266 = $1,783 Mil.
Total Current Assets was $1,406 Mil.
Total Assets was $2,531 Mil.
Property, Plant and Equipment(Net PPE) was $448 Mil.
Depreciation, Depletion and Amortization(DDA) was $114 Mil.
Selling, General & Admin. Expense(SGA) was $1,072 Mil.
Total Current Liabilities was $948 Mil.
Long-Term Debt was $40 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)|
|=||(206.951 / 2688.771)||/||(183.474 / 3114.107)|
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)|
|=||(285.499 / 3114.107)||/||(382.975 / 2688.771)|
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 - (1381.473 + 399.584) / 2351.441)||/||(1 - (1406.409 + 447.968) / 2530.858)|
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))|
|=||(114.281 / (114.281 + 447.968))||/||(141.878 / (141.878 + 399.584))|
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)|
|=||(1027.37 / 2688.771)||/||(1072.051 / 3114.107)|
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)|
|=||((40.383 + 838.161) / 2351.441)||/||((39.756 + 948.087) / 2530.858)|
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|
|=||(78.022 - -5.647||-||210.604)||/||2351.441|
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.
Apollo Education Group Inc has a M-score of -2.61 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
Apollo Education Group Inc Annual Data
Apollo Education Group Inc Quarterly Data