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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 -0.72. The lowest was -3.93. And the median was -2.77.
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 * 1.0153||+||0.528 * 1.0774||+||0.404 * 1.0354||+||0.892 * 0.8498||+||0.115 * 0.9509|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0266||+||4.679 * -0.0933||-||0.327 * 0.996|
|This Year (Nov15) TTM:||Last Year (Nov14) TTM:|
|Accounts Receivable was $206 Mil.|
Revenue was 586.021 + 587.172 + 681.481 + 578.572 = $2,433 Mil.
Gross Profit was 294.694 + 295.48 + 382.975 + 285.499 = $1,259 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 $146 Mil.
Selling, General & Admin. Expense(SGA) was $911 Mil.
Total Current Liabilities was $751 Mil.
Long-Term Debt was $21 Mil.
Net Income was -60.765 + -18.484 + 48.064 + -33.61 = $-65 Mil.
Non Operating Income was -0.843 + -1.286 + -2.039 + -1.146 = $-5 Mil.
Cash Flow from Operations was -18.867 + 44.879 + 68.59 + 36.814 = $131 Mil.
|Accounts Receivable was $239 Mil.
Revenue was 714.525 + 682.353 + 793.61 + 672.754 = $2,863 Mil.
Gross Profit was 392.951 + 377.559 + 468.989 + 356.177 = $1,596 Mil.
Total Current Assets was $1,421 Mil.
Total Assets was $2,422 Mil.
Property, Plant and Equipment(Net PPE) was $418 Mil.
Depreciation, Depletion and Amortization(DDA) was $161 Mil.
Selling, General & Admin. Expense(SGA) was $1,044 Mil.
Total Current Liabilities was $871 Mil.
Long-Term Debt was $47 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)|
|=||(206.206 / 2433.246)||/||(238.998 / 2863.242)|
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)|
|=||(295.48 / 2863.242)||/||(294.694 / 2433.246)|
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 - (1184.991 + 351.602) / 2046.578)||/||(1 - (1421.216 + 418.088) / 2422.288)|
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))|
|=||(161.307 / (161.307 + 418.088))||/||(145.566 / (145.566 + 351.602))|
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)|
|=||(911.26 / 2433.246)||/||(1044.483 / 2863.242)|
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)|
|=||((20.782 + 751.491) / 2046.578)||/||((46.99 + 870.747) / 2422.288)|
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|
|=||(-64.795 - -5.314||-||131.416)||/||2046.578|
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 -2.99 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