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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 -3.93. And the median was -2.76.
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 * 1.3869||+||0.528 * 1.0936||+||0.404 * 1.1334||+||0.892 * 0.8206||+||0.115 * 1.0282|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9326||+||4.679 * -0.0497||-||0.327 * 0.9682|
|This Year (Nov16) TTM:||Last Year (Nov15) TTM:|
|Accounts Receivable was $235 Mil.|
Revenue was 484.499 + 492.479 + 558.002 + 465.348 = $2,000 Mil.
Gross Profit was 235.746 + 231.777 + 283.516 + 194.708 = $946 Mil.
Total Current Assets was $1,082 Mil.
Total Assets was $1,955 Mil.
Property, Plant and Equipment(Net PPE) was $321 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $697 Mil.
Total Current Liabilities was $681 Mil.
Long-Term Debt was $33 Mil.
Net Income was 4.07 + 15.863 + 20.744 + -60.396 = $-20 Mil.
Non Operating Income was -0.644 + -0.983 + -0.273 + -1.113 = $-3 Mil.
Cash Flow from Operations was 16.454 + 35.451 + -13.45 + 41.95 = $80 Mil.
|Accounts Receivable was $206 Mil.
Revenue was 586.021 + 600.291 + 676.358 + 575.103 = $2,438 Mil.
Gross Profit was 294.694 + 300.104 + 381.517 + 284.17 = $1,260 Mil.
Total Current Assets was $1,185 Mil.
Total Assets was $2,047 Mil.
Property, Plant and Equipment(Net PPE) was $352 Mil.
Depreciation, Depletion and Amortization(DDA) was $123 Mil.
Selling, General & Admin. Expense(SGA) was $911 Mil.
Total Current Liabilities was $751 Mil.
Long-Term Debt was $21 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)|
|=||(234.676 / 2000.328)||/||(206.206 / 2437.773)|
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)|
|=||(1260.485 / 2437.773)||/||(945.747 / 2000.328)|
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 - (1081.689 + 321.345) / 1955.243)||/||(1 - (1184.991 + 351.602) / 2046.578)|
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))|
|=||(122.869 / (122.869 + 351.602))||/||(108.173 / (108.173 + 321.345))|
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)|
|=||(697.021 / 2000.328)||/||(910.833 / 2437.773)|
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)|
|=||((33.251 + 681.106) / 1955.243)||/||((20.782 + 751.491) / 2046.578)|
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|
|=||(-19.719 - -3.013||-||80.405)||/||1955.243|
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 -2.39 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