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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 -0.79. The lowest was -3.97. And the median was -2.80.
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 * 1.2346||+||0.528 * 1.0889||+||0.404 * 1.2495||+||0.892 * 0.8326||+||0.115 * 0.882|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9767||+||4.679 * -0.1056||-||0.327 * 1.03|
|This Year (Feb16) TTM:||Last Year (Feb15) TTM:|
|Accounts Receivable was $231 Mil.|
Revenue was 465.348 + 586.021 + 587.172 + 681.481 = $2,320 Mil.
Gross Profit was 194.708 + 294.694 + 295.48 + 382.975 = $1,168 Mil.
Total Current Assets was $1,117 Mil.
Total Assets was $2,110 Mil.
Property, Plant and Equipment(Net PPE) was $346 Mil.
Depreciation, Depletion and Amortization(DDA) was $147 Mil.
Selling, General & Admin. Expense(SGA) was $849 Mil.
Total Current Liabilities was $831 Mil.
Long-Term Debt was $41 Mil.
Net Income was -60.396 + -60.765 + -18.484 + 48.064 = $-92 Mil.
Non Operating Income was -1.113 + -0.843 + -1.286 + -2.039 = $-5 Mil.
Cash Flow from Operations was 41.95 + -18.867 + 44.879 + 68.59 = $137 Mil.
|Accounts Receivable was $224 Mil.
Revenue was 578.572 + 719.052 + 688.866 + 799.919 = $2,786 Mil.
Gross Profit was 285.499 + 394.788 + 374.88 + 472.155 = $1,527 Mil.
Total Current Assets was $1,413 Mil.
Total Assets was $2,406 Mil.
Property, Plant and Equipment(Net PPE) was $403 Mil.
Depreciation, Depletion and Amortization(DDA) was $144 Mil.
Selling, General & Admin. Expense(SGA) was $1,044 Mil.
Total Current Liabilities was $920 Mil.
Long-Term Debt was $45 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)|
|=||(230.679 / 2320.022)||/||(224.404 / 2786.409)|
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)|
|=||(294.694 / 2786.409)||/||(194.708 / 2320.022)|
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 - (1116.889 + 346.498) / 2110.321)||/||(1 - (1412.738 + 402.92) / 2405.941)|
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))|
|=||(143.679 / (143.679 + 402.92))||/||(147.097 / (147.097 + 346.498))|
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)|
|=||(849.106 / 2320.022)||/||(1044.11 / 2786.409)|
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)|
|=||((41.075 + 830.833) / 2110.321)||/||((45.157 + 919.954) / 2405.941)|
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|
|=||(-91.581 - -5.281||-||136.552)||/||2110.321|
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 -2.78 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