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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.
Apollo Education Group Inc has a M-score of -2.26 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Apollo Education Group Inc was -0.79. The lowest was -3.79. And the median was -2.81.
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 * 1.2278||+||0.528 * 1.1224||+||0.404 * 1.791||+||0.892 * 0.8298||+||0.115 * 1.4475|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8511||+||4.679 * -0.0703||-||0.327 * 0.8975|
|This Year (May14) TTM:||Last Year (May13) TTM:|
|Accounts Receivable was $202 Mil.|
Revenue was 799.919 + 679.058 + 856.335 + 844.981 = $3,180 Mil.
Gross Profit was 472.155 + 359.483 + 516.656 + 474.756 = $1,823 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 $1,124 Mil.
Total Current Liabilities was $948 Mil.
Long-Term Debt was $40 Mil.
Net Income was 66.025 + 14.605 + 98.891 + 21.551 = $201 Mil.
Non Operating Income was -0.284 + 0.107 + 0.807 + 1.596 = $2 Mil.
Cash Flow from Operations was 95.522 + 64.587 + 128.897 + 87.695 = $377 Mil.
|Accounts Receivable was $198 Mil.
Revenue was 946.774 + 834.372 + 1055.183 + 996.497 = $3,833 Mil.
Gross Profit was 553.387 + 450.67 + 623.033 + 839.016 = $2,466 Mil.
Total Current Assets was $1,532 Mil.
Total Assets was $2,393 Mil.
Property, Plant and Equipment(Net PPE) was $504 Mil.
Depreciation, Depletion and Amortization(DDA) was $210 Mil.
Selling, General & Admin. Expense(SGA) was $1,592 Mil.
Total Current Liabilities was $973 Mil.
Long-Term Debt was $68 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)|
|=||(201.66 / 3180.293)||/||(197.952 / 3832.826)|
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)|
|=||(359.483 / 3832.826)||/||(472.155 / 3180.293)|
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 - (1406.409 + 447.968) / 2530.858)||/||(1 - (1532.205 + 503.609) / 2392.954)|
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))|
|=||(209.931 / (209.931 + 503.609))||/||(114.281 / (114.281 + 447.968))|
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)|
|=||(1124.091 / 3180.293)||/||(1591.775 / 3832.826)|
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)|
|=||((39.756 + 948.087) / 2530.858)||/||((67.578 + 973.084) / 2392.954)|
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|
|=||(201.072 - 2.226||-||376.701)||/||2530.858|
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 -2.26 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