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Google Inc (NAS:GOOG)
Beneish M-Score
-2.67 (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.

Google Inc has a M-score of -2.67 suggests that the company is not a manipulator.

GOOG' s 10-Year Beneish M-Score Range
Min: -2.98   Max: -0.06
Current: -2.67

-2.98
-0.06

During the past 13 years, the highest Beneish M-Score of Google 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 Google 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 * 0.9866+0.528 * 0.9859+0.404 * 0.9997+0.892 * 1.1442+0.115 * 1.0885
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0311+4.679 * -0.0767-0.327 * 0.8441
=-2.67

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 3931 + 3586 + 4757 + 2813 = $15,087 Mil.
Non Operating Income was -83 + -43 + -69 + -29 = $-224 Mil.
Cash Flow from Operations was 6985 + 6617 + 6364 + 5994 = $25,960 Mil.
Accounts Receivable was $8,321 Mil.
Revenue was 15955 + 15420 + 15707 + 13754 = $60,836 Mil.
Gross Profit was 9841 + 9459 + 9454 + 8345 = $37,099 Mil.
Total Current Assets was $77,905 Mil.
Total Assets was $121,608 Mil.
Property, Plant and Equipment(Net PPE) was $19,486 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,175 Mil.
Selling, General & Admin. Expense(SGA) was $12,418 Mil.
Total Current Liabilities was $17,097 Mil.
Long-Term Debt was $3,232 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)
=(9394 / 69611) / (8321 / 60836)
=0.13494994 / 0.13677757
=0.9866

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)
=(10902 / 60836) / (11144 / 69611)
=0.60981984 / 0.61852293
=0.9859

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 - (84164 + 27008) / 138807) / (1 - (77905 + 19486) / 121608)
=0.19908938 / 0.19913986
=0.9997

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
=69611 / 60836
=1.1442

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))
=(4175 / (4175 + 19486)) / (5225 / (5225 + 27008))
=0.1764507 / 0.16210095
=1.0885

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)
=(14651 / 69611) / (12418 / 60836)
=0.21046961 / 0.20412256
=1.0311

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)
=((2225 + 17362) / 138807) / ((3232 + 17097) / 121608)
=0.1411096 / 0.16716828
=0.8441

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
=(15087 - -224 - 25960) / 138807
=-0.0767

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.

Google Inc has a M-score of -2.67 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.

Google Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.14621.11261.04510.93021.10841.07920.98731.09761.0180.8886
GMI 0.93580.96441.00380.99150.96550.97110.98871.10750.9750.9887
AQI 0.41365.46740.96171.26490.80040.92080.95441.62810.84641.0446
SGI 1.92481.72761.56471.31351.08511.23971.29281.32371.10651.1888
DEPI 1.20311.2140.99740.86770.93091.56920.94360.80831.03861.1158
SGAI 0.6681.08451.09371.04150.89771.05161.26940.96580.9941.0706
LVGI 0.70640.97321.13770.90190.9362.54730.94891.12650.88560.9339
TATA -0.0884-0.0299-0.0632-0.0774-0.0651-0.0418-0.0642-0.0627-0.05-0.0614
M-score -2.03-0.06-2.31-2.51-2.68-2.89-2.59-2.14-2.63-2.67

Google Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.1230.84770.93241.0180.93061.00480.88660.88860.93750.9866
GMI 1.11621.09411.0230.9750.95820.95380.98120.98870.98540.9859
AQI 1.65420.85540.84750.84640.89710.94120.96611.04461.03460.9997
SGI 1.31291.25791.17031.10651.10491.13121.17291.18881.16991.1442
DEPI 0.7740.74510.87671.03861.14151.26491.1161.11581.12871.0885
SGAI 1.02771.02441.00220.9941.02171.02231.03731.07061.0521.0311
LVGI 1.0180.86560.81930.88560.99650.97671.05710.93390.78650.8441
TATA -0.0553-0.0527-0.0527-0.05-0.0553-0.059-0.0666-0.0619-0.0746-0.0767
M-score -2.06-2.63-2.64-2.63-2.76-2.65-2.78-2.67-2.65-2.67
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