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Nike Inc (NYSE:NKE)
Beneish M-Score
-2.63 (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 -2.63 suggests that the company is not a manipulator.

NKE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -1.53
Current: -2.63

-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 -2.56.


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 * 0.9441+0.528 * 0.9821+0.404 * 0.9972+0.892 * 1.0531+0.115 * 1.0173
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0069+4.679 * -0.0248-0.327 * 1.0682
=-2.63

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $3,437 Mil.
Revenue was 7686 + 8414 + 7779 + 7460 = $31,339 Mil.
Gross Profit was 3501 + 3995 + 3593 + 3426 = $14,515 Mil.
Total Current Assets was $16,755 Mil.
Total Assets was $22,583 Mil.
Property, Plant and Equipment(Net PPE) was $3,235 Mil.
Depreciation, Depletion and Amortization(DDA) was $655 Mil.
Selling, General & Admin. Expense(SGA) was $10,111 Mil.
Total Current Liabilities was $5,511 Mil.
Long-Term Debt was $2,067 Mil.
Net Income was 785 + 1179 + 865 + 791 = $3,620 Mil.
Non Operating Income was 34 + 31 + -58 + 5 = $12 Mil.
Cash Flow from Operations was 545 + 491 + 1342 + 1791 = $4,169 Mil.
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 $605 Mil.
Selling, General & Admin. Expense(SGA) was $9,535 Mil.
Total Current Liabilities was $4,937 Mil.
Long-Term Debt was $1,084 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)
=(3437 / 31339) / (3457 / 29759)
=0.10967166 / 0.11616654
=0.9441

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)
=(3995 / 29759) / (3501 / 31339)
=0.45485399 / 0.46316092
=0.9821

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 - (16755 + 3235) / 22583) / (1 - (14033 + 2927) / 19167)
=0.11482088 / 0.11514582
=0.9972

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
=31339 / 29759
=1.0531

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))
=(605 / (605 + 2927)) / (655 / (655 + 3235))
=0.17129105 / 0.16838046
=1.0173

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)
=(10111 / 31339) / (9535 / 29759)
=0.32263314 / 0.32040727
=1.0069

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)
=((2067 + 5511) / 22583) / ((1084 + 4937) / 19167)
=0.33556215 / 0.31413367
=1.0682

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
=(3620 - 12 - 4169) / 22583
=-0.0248

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 -2.63 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.

Nike Inc Annual Data

May06May07May08May09May10May11May12May13May14May15
DSRI 0.97310.95380.98211.00220.92671.11930.86060.91731.00320.8883
GMI 1.01051.00420.97411.00350.96951.01181.05170.99780.97360.9739
AQI 0.90821.01071.57560.85440.90140.99780.86280.91391.33121.0898
SGI 1.08841.09171.14091.02950.99151.0581.15981.0851.09821.1008
DEPI 1.01781.07660.95430.88740.96251.17510.95230.89450.99180.9663
SGAI 0.97451.02871.03771.00331.03750.95040.95961.01511.02391.0251
LVGI 1.00620.91121.07960.9270.94261.06840.94141.10921.13591.025
TATA -0.0275-0.0363-0.0036-0.0255-0.09060.02310.0285-0.0311-0.0227-0.0625
M-score -2.58-2.57-2.21-2.62-3.03-2.20-2.34-2.71-2.43-2.78

Nike Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 0.8660.9310.9531.00321.0020.95190.87870.88830.8510.9441
GMI 0.98610.97660.97690.97360.97090.9730.96750.97390.97910.9821
AQI 0.75990.90320.92811.33121.3281.30861.2931.08981.0330.9972
SGI 1.07941.08081.08931.09821.11621.13211.11731.10081.07721.0531
DEPI 0.92491.01640.93080.99180.99480.97910.95380.96630.96741.0173
SGAI 0.97490.99141.00041.02391.0561.04621.04381.02511.00931.0069
LVGI 1.08341.08361.2351.13591.13081.1081.12111.0250.94341.0682
TATA -0.02040.0112-0.0138-0.0227-0.0178-0.0393-0.0851-0.0625-0.0469-0.0248
M-score -2.76-2.49-2.63-2.43-2.39-2.53-2.84-2.78-2.75-2.63
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