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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 -1.45. The lowest was -3.33. And the median was -2.90.
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 * 1.3568||+||0.528 * 1.0685||+||0.404 * 1.5859||+||0.892 * 0.8215||+||0.115 * 0.9928|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.926||+||4.679 * -0.0537||-||0.327 * 0.9436|
|This Year (Aug14) TTM:||Last Year (Aug13) TTM:|
|Accounts Receivable was $205 Mil.|
Revenue was 688.866 + 799.919 + 679.058 + 856.335 = $3,024 Mil.
Gross Profit was 374.88 + 472.155 + 359.483 + 516.656 = $1,723 Mil.
Total Current Assets was $2,043 Mil.
Total Assets was $3,093 Mil.
Property, Plant and Equipment(Net PPE) was $436 Mil.
Depreciation, Depletion and Amortization(DDA) was $151 Mil.
Selling, General & Admin. Expense(SGA) was $1,061 Mil.
Total Current Liabilities was $1,543 Mil.
Long-Term Debt was $48 Mil.
Net Income was 29.783 + 66.025 + 14.605 + 98.891 = $209 Mil.
Non Operating Income was -1.177 + -0.284 + 0.107 + 0.807 = $-1 Mil.
Cash Flow from Operations was 86.901 + 95.522 + 64.587 + 128.897 = $376 Mil.
|Accounts Receivable was $184 Mil.
Revenue was 844.981 + 946.774 + 834.372 + 1055.183 = $3,681 Mil.
Gross Profit was 679.374 + 488.309 + 450.67 + 623.033 = $2,241 Mil.
Total Current Assets was $2,150 Mil.
Total Assets was $2,998 Mil.
Property, Plant and Equipment(Net PPE) was $473 Mil.
Depreciation, Depletion and Amortization(DDA) was $162 Mil.
Selling, General & Admin. Expense(SGA) was $1,394 Mil.
Total Current Liabilities was $1,570 Mil.
Long-Term Debt was $64 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)|
|=||(204.989 / 3024.178)||/||(183.916 / 3681.31)|
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)|
|=||(472.155 / 3681.31)||/||(374.88 / 3024.178)|
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 - (2042.55 + 435.733) / 3092.935)||/||(1 - (2149.656 + 472.614) / 2997.947)|
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))|
|=||(161.733 / (161.733 + 472.614))||/||(150.575 / (150.575 + 435.733))|
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)|
|=||(1060.729 / 3024.178)||/||(1394.416 / 3681.31)|
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)|
|=||((47.59 + 1543.4) / 3092.935)||/||((64.004 + 1570.315) / 2997.947)|
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|
|=||(209.304 - -0.547||-||375.907)||/||3092.935|
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