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GuruFocus has detected 4 Warning Signs with Apollo Education Group Inc $APOL.
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Apollo Education Group Inc (NAS:APOL)
Beneish M-Score
-2.39 (As of Today)

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 -2.39 suggests that the company is not a manipulator.

APOL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.93   Max: -0.87
Current: -2.39

-3.93
-0.87

During the past 13 years, the highest Beneish M-Score of Apollo Education Group Inc was -0.87. The lowest was -3.93. And the median was -2.76.


Definition

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
=-2.39

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

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

Measured as the ratio of days’ sales in receivables in year t to year t-1.

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)
=0.11731876 / 0.08458786
=1.3869

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1260.485 / 2437.773) / (945.747 / 2000.328)
=0.51706414 / 0.47279596
=1.0936

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

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)
=0.28242474 / 0.24918913
=1.1334

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2000.328 / 2437.773
=0.8206

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))
=0.25895998 / 0.25184742
=1.0282

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)
=0.34845335 / 0.37363323
=0.9326

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)
=0.36535459 / 0.37734843
=0.9682

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-19.719 - -3.013 - 80.405) / 1955.243
=-0.0497

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.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Apollo Education Group Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
DSRI 1.0311.05731.06780.71140.77291.0371.1831.3441.09351.3342
GMI 1.01190.96830.93390.9311.03471.08691.0061.00191.081.1076
AQI 0.93541.2241.87030.79950.52281.18221.0021.58591.38881.0647
SGI 1.09941.15311.25871.24590.95640.89010.86180.82930.85630.819
DEPI 1.04951.06551.00660.79660.85890.93950.73921.25210.97721.0582
SGAI 1.1221.02840.96480.9011.07121.06841.03441.04481.08320.9097
LVGI 1.10490.92311.21840.94391.03041.07870.90050.94360.7630.9501
TATA -0.124-0.1377-0.1087-0.1332-0.0988-0.045-0.0774-0.0537-0.0605-0.0628
M-score -3.01-2.83-2.44-3.25-3.40-2.68-2.80-2.29-2.55-2.51

Apollo Education Group Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
DSRI 1.3441.45111.43471.31691.09351.01341.22121.04541.33421.3869
GMI 1.00191.03141.04241.06121.081.07781.09531.11681.10761.0936
AQI 1.58591.29750.96020.90751.38881.03541.24951.27371.06471.1334
SGI 0.82930.84040.85220.85650.85630.85140.84180.83440.8190.8206
DEPI 1.25211.13341.03751.12150.97721.03821.06531.01941.05821.0282
SGAI 1.04481.07231.11141.10861.08321.02420.97430.94670.90970.9326
LVGI 0.94360.9390.9650.95720.7630.9961.031.00650.95010.9682
TATA -0.0537-0.0489-0.0572-0.054-0.0605-0.0933-0.1056-0.0834-0.0628-0.0497
M-score -2.29-2.28-2.48-2.56-2.55-2.98-2.76-2.79-2.51-2.39
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