Switch to:
Alphabet Inc (NAS:GOOG)
Beneish M-Score
-2.55 (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 -2.55 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: -2.55

-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 -2.59.


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 * 1.0962+0.528 * 0.989+0.404 * 0.9228+0.892 * 1.1496+0.115 * 1.1193
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9249+4.679 * -0.0595-0.327 * 0.9978
=-2.55

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $10,818 Mil.
Revenue was 20257 + 21329 + 18675 + 17727 = $77,988 Mil.
Gross Profit was 12609 + 13141 + 11638 + 11144 = $48,532 Mil.
Total Current Assets was $90,955 Mil.
Total Assets was $149,747 Mil.
Property, Plant and Equipment(Net PPE) was $30,162 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,257 Mil.
Selling, General & Admin. Expense(SGA) was $15,381 Mil.
Total Current Liabilities was $17,684 Mil.
Long-Term Debt was $1,987 Mil.
Net Income was 4207 + 4923 + 3979 + 3931 = $17,040 Mil.
Non Operating Income was -453 + -428 + -50 + -83 = $-1,014 Mil.
Cash Flow from Operations was 7658 + 6415 + 6007 + 6880 = $26,960 Mil.
Accounts Receivable was $8,584 Mil.
Revenue was 17258 + 18103 + 16523 + 15955 = $67,839 Mil.
Gross Profit was 10902 + 11182 + 9828 + 9841 = $41,753 Mil.
Total Current Assets was $80,313 Mil.
Total Assets was $133,400 Mil.
Property, Plant and Equipment(Net PPE) was $25,448 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,070 Mil.
Selling, General & Admin. Expense(SGA) was $14,466 Mil.
Total Current Liabilities was $14,336 Mil.
Long-Term Debt was $3,226 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)
=(10818 / 77988) / (8584 / 67839)
=0.13871365 / 0.12653488
=1.0962

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)
=(13141 / 67839) / (12609 / 77988)
=0.61547193 / 0.62230087
=0.989

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 - (90955 + 30162) / 149747) / (1 - (80313 + 25448) / 133400)
=0.19118914 / 0.20718891
=0.9228

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
=77988 / 67839
=1.1496

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))
=(5070 / (5070 + 25448)) / (5257 / (5257 + 30162))
=0.16613146 / 0.14842316
=1.1193

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)
=(15381 / 77988) / (14466 / 67839)
=0.19722265 / 0.21324017
=0.9249

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)
=((1987 + 17684) / 149747) / ((3226 + 14336) / 133400)
=0.13136156 / 0.13164918
=0.9978

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
=(17040 - -1014 - 26960) / 149747
=-0.0595

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 -2.55 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 1.11261.04510.93021.10841.07920.98731.09760.94470.95761.084
GMI 0.96591.00380.99150.96550.9710.98871.10751.0370.92960.9781
AQI 5.46740.96171.26490.80040.92080.95441.62810.84641.06370.9314
SGI 1.72761.56471.31351.08511.23981.29281.32371.19231.10321.1362
DEPI 1.2140.99740.86770.93071.56950.94360.80831.03861.11581.1612
SGAI 0.94991.09371.04150.89761.05181.26940.96581.01181.05180.9557
LVGI 0.97321.13770.90190.9362.54730.94891.12650.88560.94680.9329
TATA -0.0299-0.0633-0.0774-0.0651-0.0417-0.0642-0.0627-0.0502-0.0623-0.0676
M-score -0.04-2.31-2.51-2.68-2.89-2.59-2.14-2.60-2.71-2.59

Alphabet Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.93410.85730.92750.8190.88860.93750.98661.0491.0841.0962
GMI 1.03821.01711.01091.03990.98870.98540.98590.97020.97810.989
AQI 0.84640.89710.94120.96611.06371.03460.99970.98320.93140.9228
SGI 1.20591.19951.22541.26971.18881.16991.14421.12831.13621.1496
DEPI 1.03861.14151.26491.1161.11581.12871.08851.24611.16121.1193
SGAI 1.01831.04581.04511.06081.07061.0521.03111.00790.95570.9249
LVGI 0.88560.99650.97671.05710.94680.78650.84410.8430.93290.9978
TATA -0.0517-0.0569-0.0605-0.0686-0.0641-0.0771-0.0784-0.0667-0.0615-0.0595
M-score -2.60-2.72-2.62-2.74-2.68-2.66-2.68-2.58-2.56-2.55
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)
FEEDBACK