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Nike Inc (NYSE:NKE)
Beneish M-Score
-2.39 (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 -2.39 suggests that the company is not a manipulator.

NKE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.05   Max: -1.53
Current: -2.39

-3.05
-1.53

During the past 13 years, the highest Beneish M-Score of Nike Inc was -1.53. The lowest was -3.05. And the median was -2.55.


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 * 0.9691+0.528 * 0.9894+0.404 * 0.951+0.892 * 1.055+0.115 * 1.0851
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0008+4.679 * 0.021-0.327 * 1.0316
=-2.39

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $3,368 Mil.
Revenue was 8032 + 7686 + 8414 + 7779 = $31,911 Mil.
Gross Profit was 3689 + 3501 + 3995 + 3593 = $14,778 Mil.
Total Current Assets was $15,256 Mil.
Total Assets was $20,987 Mil.
Property, Plant and Equipment(Net PPE) was $3,329 Mil.
Depreciation, Depletion and Amortization(DDA) was $667 Mil.
Selling, General & Admin. Expense(SGA) was $10,298 Mil.
Total Current Liabilities was $4,980 Mil.
Long-Term Debt was $2,048 Mil.
Net Income was 950 + 785 + 1179 + 865 = $3,779 Mil.
Non Operating Income was 17 + 34 + 31 + 2 = $84 Mil.
Cash Flow from Operations was 876 + 545 + 491 + 1342 = $3,254 Mil.
Accounts Receivable was $3,294 Mil.
Revenue was 7460 + 7380 + 7982 + 7425 = $30,247 Mil.
Gross Profit was 3426 + 3327 + 3721 + 3385 = $13,859 Mil.
Total Current Assets was $15,207 Mil.
Total Assets was $20,541 Mil.
Property, Plant and Equipment(Net PPE) was $2,862 Mil.
Depreciation, Depletion and Amortization(DDA) was $633 Mil.
Selling, General & Admin. Expense(SGA) was $9,753 Mil.
Total Current Liabilities was $5,586 Mil.
Long-Term Debt was $1,082 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)
=(3368 / 31911) / (3294 / 30247)
=0.10554354 / 0.10890336
=0.9691

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)
=(3501 / 30247) / (3689 / 31911)
=0.4581942 / 0.4631005
=0.9894

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 - (15256 + 3329) / 20987) / (1 - (15207 + 2862) / 20541)
=0.1144518 / 0.12034468
=0.951

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
=31911 / 30247
=1.055

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))
=(633 / (633 + 2862)) / (667 / (667 + 3329))
=0.18111588 / 0.16691692
=1.0851

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)
=(10298 / 31911) / (9753 / 30247)
=0.32271004 / 0.3224452
=1.0008

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)
=((2048 + 4980) / 20987) / ((1082 + 5586) / 20541)
=0.33487397 / 0.32461905
=1.0316

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
=(3779 - 84 - 3254) / 20987
=0.021

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 -2.39 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 0.97310.95380.98211.00220.92671.07930.90380.90581.00320.8883
GMI 1.01051.00420.97411.00350.96951.01551.05020.99560.97360.9739
AQI 0.90821.01071.57560.85440.90140.99781.0120.80031.29611.0898
SGI 1.08841.09171.14091.02950.99151.09721.15661.04911.09821.1008
DEPI 1.01781.07660.95430.88740.96351.17390.95940.87210.94891.0283
SGAI 0.97451.02871.03771.00331.03750.96420.960.9981.0261.0251
LVGI 1.00620.91121.07960.9270.94261.06840.93751.10361.14641.025
TATA -0.0275-0.0363-0.0036-0.0255-0.09060.01920.0244-0.032-0.0111-0.0652
M-score -2.58-2.57-2.21-2.62-3.03-2.22-2.26-2.80-2.39-2.78

Nike Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 0.95470.96941.01091.0020.95190.87870.88830.8510.94410.9691
GMI 0.97490.97580.97270.97090.9730.96750.97390.97910.98210.9894
AQI 0.90320.92811.29611.3281.30861.2931.08981.0330.99720.951
SGI 1.0541.07081.08981.11621.13211.11731.10081.07721.05311.055
DEPI 1.01070.87280.94891.00971.03771.03871.02830.92350.90311.0851
SGAI 0.97950.99271.02151.05861.04951.04761.02511.00911.00641.0008
LVGI 1.08361.2351.14641.13081.1081.12111.0250.94341.06821.0316
TATA 0.0115-0.0157-0.0111-0.0022-0.013-0.0751-0.0652-0.0544-0.04130.021
M-score -2.49-2.65-2.39-2.32-2.40-2.78-2.78-2.79-2.72-2.39
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