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Nike Inc (NYSE:NKE)
Beneish M-Score
-2.40 (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 -2.40 suggests that the company is not a manipulator.

NKE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -1.85
Current: -2.4

-3.03
-1.85

During the past 13 years, the highest Beneish M-Score of Nike Inc was -1.85. The lowest was -3.03. And the median was -2.58.


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 * 0.9122+0.528 * 0.9941+0.404 * 0.9596+0.892 * 1.058+0.115 * 1.1202
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0003+4.679 * 0.0245-0.327 * 1.0035
=-2.40

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

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $3,241 Mil.
Revenue was 8244 + 8032 + 7686 + 8414 = $32,376 Mil.
Gross Profit was 3786 + 3689 + 3501 + 3995 = $14,971 Mil.
Total Current Assets was $15,025 Mil.
Total Assets was $21,396 Mil.
Property, Plant and Equipment(Net PPE) was $3,520 Mil.
Depreciation, Depletion and Amortization(DDA) was $662 Mil.
Selling, General & Admin. Expense(SGA) was $10,469 Mil.
Total Current Liabilities was $5,358 Mil.
Long-Term Debt was $2,010 Mil.
Net Income was 846 + 950 + 785 + 1179 = $3,760 Mil.
Non Operating Income was 58 + 17 + 34 + 31 = $140 Mil.
Cash Flow from Operations was 1184 + 876 + 545 + 491 = $3,096 Mil.
Accounts Receivable was $3,358 Mil.
Revenue was 7779 + 7460 + 7380 + 7982 = $30,601 Mil.
Gross Profit was 3593 + 3426 + 3327 + 3721 = $14,067 Mil.
Total Current Assets was $15,587 Mil.
Total Assets was $21,597 Mil.
Property, Plant and Equipment(Net PPE) was $3,011 Mil.
Depreciation, Depletion and Amortization(DDA) was $649 Mil.
Selling, General & Admin. Expense(SGA) was $9,892 Mil.
Total Current Liabilities was $6,332 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)
=(3241 / 32376) / (3358 / 30601)
=0.10010502 / 0.10973498
=0.9122

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)
=(14067 / 30601) / (14971 / 32376)
=0.45969086 / 0.46241043
=0.9941

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 - (15025 + 3520) / 21396) / (1 - (15587 + 3011) / 21597)
=0.13324921 / 0.13886188
=0.9596

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
=32376 / 30601
=1.058

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))
=(649 / (649 + 3011)) / (662 / (662 + 3520))
=0.1773224 / 0.15829747
=1.1202

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)
=(10469 / 32376) / (9892 / 30601)
=0.32335681 / 0.32325741
=1.0003

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)
=((2010 + 5358) / 21396) / ((1079 + 6332) / 21597)
=0.34436343 / 0.34314951
=1.0035

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
=(3760 - 140 - 3096) / 21396
=0.0245

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 -2.40 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

May07May08May09May10May11May12May13May14May15May16
DSRI 0.95380.98211.00220.92671.07930.90380.90581.00320.88830.9122
GMI 1.00420.97411.00350.96951.01551.05020.99560.97360.97390.9941
AQI 1.01071.57560.85440.90140.99781.0120.80031.29611.2510.9596
SGI 1.09171.14091.02950.99151.09721.15661.04911.09821.10081.058
DEPI 1.07660.95430.88740.96351.17390.95940.87211.00980.96631.1202
SGAI 1.02871.03771.00331.03750.96420.960.9981.0261.02511.0003
LVGI 0.91121.07960.9270.94261.06840.93751.10361.14641.02481.0035
TATA -0.0363-0.0036-0.0255-0.09060.01920.0244-0.032-0.0117-0.06780.0245
M-score -2.57-2.21-2.62-3.03-2.22-2.26-2.80-2.39-2.74-2.40

Nike Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
DSRI 0.96941.01091.0020.95190.87870.88830.8510.94410.96910.9122
GMI 0.97580.97270.97090.9730.96750.97390.97910.98210.98940.9941
AQI 0.92811.29611.3281.30861.2931.2511.0330.99720.9510.9596
SGI 1.07081.08981.11621.13211.11731.10081.07721.05311.0551.058
DEPI 0.92821.00551.01111.00040.97290.97040.97011.01731.08931.1202
SGAI 0.99311.0211.05811.0491.04641.02571.00961.00691.00161.0003
LVGI 1.2351.14641.13081.1081.12111.02480.94341.06821.03161.0035
TATA -0.0149-0.0104-0.0066-0.0286-0.0751-0.0678-0.0525-0.030.01830.0245
M-score -2.64-2.38-2.34-2.47-2.79-2.74-2.78-2.66-2.40-2.40
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