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Alphabet Inc (NAS:GOOG)
Beneish M-Score
-2.61 (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 -2.61 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: -2.61

-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 -2.60.


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 * 1.0309+0.528 * 1.0115+0.404 * 0.9283+0.892 * 1.1919+0.115 * 0.9756
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9334+4.679 * -0.081-0.327 * 0.8055
=-2.61

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $11,979 Mil.
Revenue was 22451 + 21500 + 20257 + 21329 = $85,537 Mil.
Gross Profit was 13752 + 13370 + 12609 + 13141 = $52,872 Mil.
Total Current Assets was $98,546 Mil.
Total Assets was $159,948 Mil.
Property, Plant and Equipment(Net PPE) was $32,753 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,861 Mil.
Selling, General & Admin. Expense(SGA) was $16,579 Mil.
Total Current Liabilities was $14,323 Mil.
Long-Term Debt was $3,938 Mil.
Net Income was 5061 + 4877 + 4207 + 4923 = $19,068 Mil.
Non Operating Income was -11 + -124 + -453 + -428 = $-1,016 Mil.
Cash Flow from Operations was 9845 + 9120 + 7658 + 6415 = $33,038 Mil.
Accounts Receivable was $9,749 Mil.
Revenue was 18675 + 17727 + 17258 + 18103 = $71,763 Mil.
Gross Profit was 11638 + 11144 + 10902 + 11182 = $44,866 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 $14,902 Mil.
Total Current Liabilities was $18,457 Mil.
Long-Term Debt was $1,994 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)
=(11979 / 85537) / (9749 / 71763)
=0.14004466 / 0.13584995
=1.0309

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)
=(44866 / 71763) / (52872 / 85537)
=0.62519683 / 0.61811848
=1.0115

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 - (98546 + 32753) / 159948) / (1 - (88103 + 28338) / 144281)
=0.17911446 / 0.1929568
=0.9283

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
=85537 / 71763
=1.1919

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))
=(4926 / (4926 + 28338)) / (5861 / (5861 + 32753))
=0.14808802 / 0.15178433
=0.9756

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)
=(16579 / 85537) / (14902 / 71763)
=0.19382256 / 0.20765576
=0.9334

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)
=((3938 + 14323) / 159948) / ((1994 + 18457) / 144281)
=0.11416835 / 0.14174424
=0.8055

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
=(19068 - -1016 - 33038) / 159948
=-0.081

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 -2.61 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.

Alphabet Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.11261.04510.93021.10861.0790.98731.09760.94470.95761.084
GMI 0.96441.00380.99150.96550.9710.98871.10751.0370.92960.9781
AQI 5.46740.96171.26490.80050.92070.95441.62810.84641.04460.9484
SGI 1.72761.56471.31351.08511.23981.29281.32371.19231.10321.1362
DEPI 1.2140.99740.86770.93071.56960.94360.80831.03861.11581.1612
SGAI 1.08451.09371.04150.89761.05181.26940.96581.01181.05180.9557
LVGI 0.97321.13770.90190.93622.54680.94891.12650.88560.93390.9457
TATA -0.0299-0.0632-0.0774-0.0651-0.0417-0.0642-0.0627-0.0502-0.0614-0.0615
M-score -0.06-2.31-2.51-2.68-2.89-2.59-2.14-2.60-2.71-2.56

Alphabet Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.99730.90220.95760.99061.02381.0681.0841.09621.05911.0309
GMI 0.96660.97130.92960.93870.95270.95210.97810.9890.99631.0115
AQI 0.94120.96611.04461.03460.99970.98320.94840.92280.93240.9283
SGI 1.13971.15261.10321.10711.10271.10821.13621.14961.17451.1919
DEPI 1.26491.1161.11581.12871.08851.24611.16121.11931.08580.9756
SGAI 1.01681.01891.05181.04071.02451.00360.95570.92490.92340.9334
LVGI 0.97671.05710.93390.78650.84410.8430.94570.99780.88760.8055
TATA -0.0585-0.066-0.0614-0.0741-0.0805-0.0693-0.0646-0.0637-0.0658-0.081
M-score -2.64-2.78-2.71-2.68-2.71-2.60-2.57-2.57-2.55-2.61
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