Switch to:
Nike Inc (NYSE:NKE)
Beneish M-Score
-2.28 (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 -2.28 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: -2.28

-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 * 1.0078+0.528 * 1.0107+0.404 * 1.2168+0.892 * 1.0641+0.115 * 1.0968
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.015+4.679 * 0.0157-0.327 * 1.1362
=-2.28

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Aug16) TTM:Last Year (Aug15) TTM:
Accounts Receivable was $3,526 Mil.
Revenue was 9061 + 8244 + 8032 + 7686 = $33,023 Mil.
Gross Profit was 4123 + 3786 + 3689 + 3501 = $15,099 Mil.
Total Current Assets was $14,589 Mil.
Total Assets was $21,156 Mil.
Property, Plant and Equipment(Net PPE) was $3,572 Mil.
Depreciation, Depletion and Amortization(DDA) was $677 Mil.
Selling, General & Admin. Expense(SGA) was $10,789 Mil.
Total Current Liabilities was $5,363 Mil.
Long-Term Debt was $1,993 Mil.
Net Income was 1249 + 846 + 950 + 785 = $3,830 Mil.
Non Operating Income was 62 + 58 + 17 + 34 = $171 Mil.
Cash Flow from Operations was 721 + 1184 + 876 + 545 = $3,326 Mil.
Accounts Receivable was $3,288 Mil.
Revenue was 8414 + 7779 + 7460 + 7380 = $31,033 Mil.
Gross Profit was 3995 + 3593 + 3426 + 3327 = $14,341 Mil.
Total Current Assets was $15,238 Mil.
Total Assets was $20,766 Mil.
Property, Plant and Equipment(Net PPE) was $3,112 Mil.
Depreciation, Depletion and Amortization(DDA) was $659 Mil.
Selling, General & Admin. Expense(SGA) was $9,989 Mil.
Total Current Liabilities was $5,276 Mil.
Long-Term Debt was $1,079 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)
=(3526 / 33023) / (3288 / 31033)
=0.10677407 / 0.10595173
=1.0078

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)
=(14341 / 31033) / (15099 / 33023)
=0.46212097 / 0.45722678
=1.0107

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 - (14589 + 3572) / 21156) / (1 - (15238 + 3112) / 20766)
=0.1415674 / 0.11634402
=1.2168

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
=33023 / 31033
=1.0641

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))
=(659 / (659 + 3112)) / (677 / (677 + 3572))
=0.17475471 / 0.15933161
=1.0968

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)
=(10789 / 33023) / (9989 / 31033)
=0.32671169 / 0.32188316
=1.015

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)
=((1993 + 5363) / 21156) / ((1079 + 5276) / 20766)
=0.34770278 / 0.30602909
=1.1362

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
=(3830 - 171 - 3326) / 21156
=0.0157

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 -2.28 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 local exchange's currency.

Nike Inc Annual Data

May07May08May09May10May11May12May13May14May15May16
DSRI 0.95380.98211.00220.92671.11920.86060.91731.00320.88830.9122
GMI 1.00420.97411.00350.96951.01181.05170.99780.97360.97390.9941
AQI 1.01071.57560.85440.90130.99790.86280.91391.33121.2510.9596
SGI 1.09171.14091.02950.99151.0581.15981.0851.09821.10081.058
DEPI 1.07660.95430.88740.96261.1750.95230.89450.99180.96631.1202
SGAI 1.02871.03771.00331.03750.95040.95961.01511.02391.02511.0003
LVGI 0.91121.07960.9270.94261.06840.94141.10921.13591.02481.0035
TATA -0.0363-0.0036-0.0255-0.09060.02030.0285-0.0331-0.0117-0.06780.0245
M-score -2.57-2.21-2.62-3.03-2.21-2.34-2.72-2.37-2.74-2.40

Nike Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
DSRI 1.00321.0020.95190.87870.88830.8510.94410.96910.91221.0078
GMI 0.97360.97090.9730.96750.97390.97910.98210.98940.99411.0107
AQI 1.33121.3281.30861.2931.2511.0330.99720.9510.95961.2168
SGI 1.09821.11621.13211.11731.10081.07721.05311.0551.0581.0641
DEPI 0.99180.99480.97910.95380.96630.96741.01731.08931.12021.0968
SGAI 1.02391.0561.04621.04381.02511.00931.00691.00161.00031.015
LVGI 1.13591.13081.1081.12111.02480.94341.06821.03161.00351.1362
TATA -0.0117-0.0067-0.0286-0.0751-0.0678-0.0525-0.030.01830.02450.0157
M-score -2.37-2.34-2.48-2.79-2.74-2.78-2.66-2.40-2.40-2.28
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