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Alphabet Inc (NAS:GOOG)
Beneish M-Score
-2.54 (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 -2.54 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: -2.54

-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 -2.58.


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 * 1.0591+0.528 * 0.9963+0.404 * 0.9324+0.892 * 1.1745+0.115 * 1.0857
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9234+4.679 * -0.0644-0.327 * 0.8876
=-2.54

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $11,686 Mil.
Revenue was 21500 + 20257 + 21329 + 18675 = $81,761 Mil.
Gross Profit was 13370 + 12609 + 13141 + 11638 = $50,758 Mil.
Total Current Assets was $94,238 Mil.
Total Assets was $154,292 Mil.
Property, Plant and Equipment(Net PPE) was $31,413 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,513 Mil.
Selling, General & Admin. Expense(SGA) was $15,890 Mil.
Total Current Liabilities was $17,341 Mil.
Long-Term Debt was $1,984 Mil.
Net Income was 4877 + 4207 + 4923 + 3979 = $17,986 Mil.
Non Operating Income was -124 + -453 + -428 + -50 = $-1,055 Mil.
Cash Flow from Operations was 9120 + 7658 + 6415 + 5791 = $28,984 Mil.
Accounts Receivable was $9,394 Mil.
Revenue was 17727 + 17258 + 18103 + 16523 = $69,611 Mil.
Gross Profit was 11144 + 10902 + 11182 + 9828 = $43,056 Mil.
Total Current Assets was $84,164 Mil.
Total Assets was $138,807 Mil.
Property, Plant and Equipment(Net PPE) was $27,008 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,225 Mil.
Selling, General & Admin. Expense(SGA) was $14,651 Mil.
Total Current Liabilities was $17,362 Mil.
Long-Term Debt was $2,225 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)
=(11686 / 81761) / (9394 / 69611)
=0.14292878 / 0.13494994
=1.0591

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)
=(43056 / 69611) / (50758 / 81761)
=0.61852293 / 0.62080943
=0.9963

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 - (94238 + 31413) / 154292) / (1 - (84164 + 27008) / 138807)
=0.18562855 / 0.19908938
=0.9324

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
=81761 / 69611
=1.1745

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))
=(5225 / (5225 + 27008)) / (5513 / (5513 + 31413))
=0.16210095 / 0.1492986
=1.0857

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)
=(15890 / 81761) / (14651 / 69611)
=0.19434694 / 0.21046961
=0.9234

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)
=((1984 + 17341) / 154292) / ((2225 + 17362) / 138807)
=0.12524953 / 0.1411096
=0.8876

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
=(17986 - -1055 - 28984) / 154292
=-0.0644

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 -2.54 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 5.46740.96171.26490.80040.92080.95441.62810.84641.06370.9314
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 0.97321.13770.90190.9362.54730.94891.12650.88560.94680.9329
TATA -0.0299-0.0632-0.0774-0.0651-0.0418-0.0642-0.0629-0.0517-0.0647-0.0615
M-score -0.06-2.31-2.51-2.68-2.89-2.58-2.19-2.60-2.68-2.56

Alphabet Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.85730.92750.8190.88860.93750.98661.0491.0841.09621.0591
GMI 1.01711.01091.03990.98870.98540.98590.97020.97810.9890.9963
AQI 0.89710.94120.96611.06371.03460.99970.98320.93140.92280.9324
SGI 1.19951.22541.26971.18881.16991.14421.12831.13621.14961.1745
DEPI 1.14151.26491.1161.11581.12871.08851.24611.16121.11931.0858
SGAI 1.04581.04511.06081.07061.0521.03111.00790.95570.92490.9234
LVGI 0.99650.97671.05710.94680.78650.84410.8430.93290.99780.8876
TATA -0.0569-0.0605-0.0686-0.0641-0.0771-0.0799-0.0667-0.0615-0.0595-0.0644
M-score -2.72-2.62-2.74-2.68-2.66-2.69-2.58-2.56-2.55-2.54
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