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Nike Inc (NYSE:NKE)
Beneish M-Score
-2.21 (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.

Nike Inc has a M-score of -2.21 signals that the company is a manipulator.

NKE' s 10-Year Beneish M-Score Range
Min: -3.03   Max: -1.53
Current: -2.21

-3.03
-1.53

During the past 13 years, the highest Beneish M-Score of Nike Inc was -1.53. The lowest was -3.03. And the median was -2.54.


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 Nike 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 * 0.9519+0.528 * 0.973+0.404 * 1.3086+0.892 * 1.1321+0.115 * 1.2808
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0463+4.679 * 0.0211-0.327 * 1.108
=-2.21

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $3,457 Mil.
Revenue was 7380 + 7982 + 7425 + 6972 = $29,759 Mil.
Gross Profit was 3327 + 3721 + 3385 + 3103 = $13,536 Mil.
Total Current Assets was $14,033 Mil.
Total Assets was $19,167 Mil.
Property, Plant and Equipment(Net PPE) was $2,927 Mil.
Depreciation, Depletion and Amortization(DDA) was $445 Mil.
Selling, General & Admin. Expense(SGA) was $9,532 Mil.
Total Current Liabilities was $4,937 Mil.
Long-Term Debt was $1,084 Mil.
Net Income was 655 + 962 + 698 + 685 = $3,000 Mil.
Non Operating Income was -2 + -3 + -17 + -45 = $-67 Mil.
Cash Flow from Operations was 0 + 588 + 1320 + 754 = $2,662 Mil.
Accounts Receivable was $3,208 Mil.
Revenue was 6431 + 6971 + 6697 + 6187 = $26,286 Mil.
Gross Profit was 2826 + 3132 + 2940 + 2736 = $11,634 Mil.
Total Current Assets was $13,607 Mil.
Total Assets was $17,820 Mil.
Property, Plant and Equipment(Net PPE) was $2,645 Mil.
Depreciation, Depletion and Amortization(DDA) was $538 Mil.
Selling, General & Admin. Expense(SGA) was $8,047 Mil.
Total Current Liabilities was $3,851 Mil.
Long-Term Debt was $1,201 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)
=(3457 / 29759) / (3208 / 26286)
=0.11616654 / 0.12204215
=0.9519

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)
=(3721 / 26286) / (3327 / 29759)
=0.44259302 / 0.45485399
=0.973

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 - (14033 + 2927) / 19167) / (1 - (13607 + 2645) / 17820)
=0.11514582 / 0.08799102
=1.3086

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
=29759 / 26286
=1.1321

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))
=(538 / (538 + 2645)) / (445 / (445 + 2927))
=0.16902293 / 0.13196916
=1.2808

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)
=(9532 / 29759) / (8047 / 26286)
=0.32030646 / 0.30613254
=1.0463

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)
=((1084 + 4937) / 19167) / ((1201 + 3851) / 17820)
=0.31413367 / 0.28350168
=1.108

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
=(3000 - -67 - 2662) / 19167
=0.0211

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.

Nike Inc has a M-score of -2.21 signals that the company is likely to 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.

Nike Inc Annual Data

May05May06May07May08May09May10May11May12May13May14
DSRI 0.95150.97310.95380.98211.00220.92671.11930.86060.91731.0032
GMI 0.9631.01051.00420.97411.00350.96951.01181.05170.99780.9736
AQI 0.97940.90821.01071.57560.85440.90140.99780.86280.91391.3312
SGI 1.12131.08841.09171.14091.02950.99151.0581.15981.0851.0982
DEPI 1.07171.01781.07660.95430.88740.96251.17510.93430.90870.9351
SGAI 1.0170.97451.02871.03771.00331.03750.95040.95771.01711.0239
LVGI 0.89061.00620.91121.07960.9270.94261.06840.94141.10921.1359
TATA -0.0375-0.0275-0.0363-0.0036-0.0255-0.09060.02310.0175-0.0291-0.0111
M-score -2.58-2.58-2.57-2.21-2.62-3.03-2.20-2.39-2.70-2.38

Nike Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 0.91990.91780.880.92470.8660.9310.9531.00321.0020.9519
GMI 1.03891.0271.01480.99720.98610.97660.97690.97360.97090.973
AQI 1.0340.85330.89540.91390.75990.90320.92811.33121.3281.3086
SGI 1.13741.11941.11421.07631.07941.08081.08931.09821.11621.1321
DEPI 0.9990.860.97050.90870.93841.02470.8830.93510.99241.2808
SGAI 0.99841.01031.0251.01190.97670.99291.00151.02321.05531.0463
LVGI 0.98041.00350.95321.10921.08341.08361.2351.13591.13081.108
TATA -0.0199-0.0404-0.0256-0.0291-0.01840.0144-0.0115-0.0108-0.00070.0211
M-score -2.48-2.70-2.64-2.70-2.75-2.48-2.63-2.38-2.31-2.21
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