Switch to:
Alphabet Inc (NAS:GOOG)
Beneish M-Score
-2.72 (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.

Alphabet Inc has a M-score of -2.72 suggests that the company is not a manipulator.

GOOG' s Beneish M-Score Range Over the Past 10 Years
Min: -2.98   Max: -0.06
Current: -2.72

-2.98
-0.06

During the past 13 years, the highest Beneish M-Score of Alphabet Inc was -0.06. The lowest was -2.98. And the median was -2.63.


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 Alphabet 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 * 1.0565+0.528 * 0.9688+0.404 * 0.9832+0.892 * 1.1203+0.115 * 1.2461
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9746+4.679 * -0.0991-0.327 * 0.843
=-2.72

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $9,749 Mil.
Revenue was 18675 + 17727 + 17258 + 0 = $53,660 Mil.
Gross Profit was 11638 + 11144 + 10902 + 0 = $33,684 Mil.
Total Current Assets was $88,103 Mil.
Total Assets was $144,281 Mil.
Property, Plant and Equipment(Net PPE) was $28,338 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,926 Mil.
Selling, General & Admin. Expense(SGA) was $10,932 Mil.
Total Current Liabilities was $18,457 Mil.
Long-Term Debt was $1,994 Mil.
Net Income was 3979 + 3931 + 3586 + 0 = $11,496 Mil.
Non Operating Income was -50 + -83 + -43 + 0 = $-176 Mil.
Cash Flow from Operations was 6007 + 6985 + 6617 + 6364 = $25,973 Mil.
Accounts Receivable was $8,237 Mil.
Revenue was 16523 + 15955 + 15420 + 0 = $47,898 Mil.
Gross Profit was 9828 + 9841 + 9459 + 0 = $29,128 Mil.
Total Current Assets was $80,115 Mil.
Total Assets was $125,781 Mil.
Property, Plant and Equipment(Net PPE) was $20,981 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,748 Mil.
Selling, General & Admin. Expense(SGA) was $10,012 Mil.
Total Current Liabilities was $17,920 Mil.
Long-Term Debt was $3,230 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)
=(9749 / 53660) / (8237 / 47898)
=0.18168095 / 0.1719696
=1.0565

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)
=(11144 / 47898) / (11638 / 53660)
=0.6081256 / 0.62773015
=0.9688

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 - (88103 + 28338) / 144281) / (1 - (80115 + 20981) / 125781)
=0.1929568 / 0.19625381
=0.9832

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
=53660 / 47898
=1.1203

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))
=(4748 / (4748 + 20981)) / (4926 / (4926 + 28338))
=0.18453885 / 0.14808802
=1.2461

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)
=(10932 / 53660) / (10012 / 47898)
=0.20372717 / 0.20902752
=0.9746

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)
=((1994 + 18457) / 144281) / ((3230 + 17920) / 125781)
=0.14174424 / 0.1681494
=0.843

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
=(11496 - -176 - 25973) / 144281
=-0.0991

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.

Alphabet Inc has a M-score of -2.72 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 own currency.

Alphabet Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.11261.04510.93021.10841.07920.98731.19620.93410.88861.084
GMI 0.96441.00380.99150.96550.97110.98871.04011.03820.98870.9781
AQI 5.46740.96171.26490.80040.92080.95441.62810.84641.04460.9484
SGI 1.72761.56471.31351.08511.23971.29281.21461.20591.18881.1362
DEPI 1.2140.99740.86770.93091.56920.94360.80831.03861.11581.1612
SGAI 1.08451.09371.04150.89771.05161.18821.00721.01831.07060.9557
LVGI 0.97321.13770.90190.9362.54730.94891.12650.88560.93390.9457
TATA -0.0299-0.0632-0.0774-0.0651-0.0418-0.0642-0.0629-0.05-0.0614-0.0676
M-score -0.06-2.31-2.51-2.68-2.89-2.58-2.19-2.59-2.67-2.59

Alphabet Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.981.01170.92560.99130.86430.87810.93230.98911.05650.7867
GMI 0.98680.98680.9630.9570.99430.99430.98950.98990.96880.9739
AQI 0.84750.84640.89710.94120.96611.04461.03460.99970.98320.9484
SGI 1.11341.11341.11081.14651.20311.20311.17631.14141.12031.5656
DEPI 0.87671.03861.14151.26491.1161.11581.12871.08851.24611.1612
SGAI 0.9970.9971.03491.03481.05421.05421.03011.00350.97460.9686
LVGI 0.81930.88560.99650.97671.05710.93390.78650.84410.8430.9457
TATA -0.0802-0.0811-0.0849-0.0873-0.0946-0.0993-0.1114-0.112-0.0991-0.061
M-score -2.80-2.77-2.90-2.78-2.90-2.83-2.82-2.83-2.72-2.45
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK