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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 -2.28 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 -3.80. And the median was -2.82.
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 * 1.3509||+||0.528 * 1.0046||+||0.404 * 1.611||+||0.892 * 0.8301||+||0.115 * 1.362|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0169||+||4.679 * -0.0629||-||0.327 * 0.8977|
|This Year (Feb14) TTM:||Last Year (Feb13) TTM:|
|Accounts Receivable was $199 Mil.|
Revenue was 679.058 + 856.335 + 844.981 + 946.774 = $3,327 Mil.
Gross Profit was 359.483 + 516.656 + 679.374 + 488.309 = $2,044 Mil.
Total Current Assets was $1,427 Mil.
Total Assets was $2,531 Mil.
Property, Plant and Equipment(Net PPE) was $458 Mil.
Depreciation, Depletion and Amortization(DDA) was $124 Mil.
Selling, General & Admin. Expense(SGA) was $1,295 Mil.
Total Current Liabilities was $1,009 Mil.
Long-Term Debt was $44 Mil.
Net Income was 14.605 + 98.891 + 21.551 + 79.953 = $215 Mil.
Non Operating Income was 0.107 + 0.807 + 1.596 + -0.862 = $2 Mil.
Cash Flow from Operations was 64.587 + 128.897 + 87.695 + 91.403 = $373 Mil.
|Accounts Receivable was $178 Mil.
Revenue was 834.372 + 1055.183 + 996.497 + 1122.258 = $4,008 Mil.
Gross Profit was 450.67 + 623.033 + 839.016 + 560.851 = $2,474 Mil.
Total Current Assets was $1,466 Mil.
Total Assets was $2,340 Mil.
Property, Plant and Equipment(Net PPE) was $503 Mil.
Depreciation, Depletion and Amortization(DDA) was $206 Mil.
Selling, General & Admin. Expense(SGA) was $1,534 Mil.
Total Current Liabilities was $1,012 Mil.
Long-Term Debt was $71 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)|
|=||(199.102 / 3327.148)||/||(177.557 / 4008.31)|
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)|
|=||(516.656 / 4008.31)||/||(359.483 / 3327.148)|
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 - (1427.081 + 457.503) / 2531.43)||/||(1 - (1466.195 + 502.702) / 2340.064)|
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))|
|=||(205.786 / (205.786 + 502.702))||/||(124.017 / (124.017 + 457.503))|
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)|
|=||(1294.656 / 3327.148)||/||(1533.73 / 4008.31)|
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)|
|=||((43.642 + 1008.604) / 2531.43)||/||((71.203 + 1012.307) / 2340.064)|
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|
|=||(215 - 1.648||-||372.582)||/||2531.43|
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 -2.28 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