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United Parcel Service Inc (UPS) (NYSE:UPS)
Beneish M-Score
-2.85 (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.

United Parcel Service Inc (UPS) has a M-score of -2.85 suggests that the company is not a manipulator.

UPS' s 10-Year Beneish M-Score Range
Min: -3.62   Max: -0.52
Current: -2.85

-3.62
-0.52

During the past 13 years, the highest Beneish M-Score of United Parcel Service Inc (UPS) was -0.52. The lowest was -3.62. And the median was -2.85.


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 United Parcel Service Inc (UPS) 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 * 0.9415+0.528 * 0.9961+0.404 * 1.1668+0.892 * 1.0475+0.115 * 0.9602
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0702+4.679 * -0.0827-0.327 * 1.0715
=-2.85

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $5,724 Mil.
Revenue was 13977 + 15895 + 14290 + 14268 = $58,430 Mil.
Gross Profit was 10835 + 12846 + 10681 + 10718 = $45,080 Mil.
Total Current Assets was $13,915 Mil.
Total Assets was $37,332 Mil.
Property, Plant and Equipment(Net PPE) was $17,901 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,961 Mil.
Selling, General & Admin. Expense(SGA) was $32,344 Mil.
Total Current Liabilities was $10,610 Mil.
Long-Term Debt was $9,941 Mil.
Net Income was 1026 + 453 + 1214 + 454 = $3,147 Mil.
Non Operating Income was 4 + -5 + 2 + 25 = $26 Mil.
Cash Flow from Operations was 2751 + 1535 + 2359 + -435 = $6,210 Mil.
Accounts Receivable was $5,804 Mil.
Revenue was 13779 + 14976 + 13521 + 13507 = $55,783 Mil.
Gross Profit was 10273 + 12113 + 10236 + 10250 = $42,872 Mil.
Total Current Assets was $14,620 Mil.
Total Assets was $37,085 Mil.
Property, Plant and Equipment(Net PPE) was $17,769 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,861 Mil.
Selling, General & Admin. Expense(SGA) was $28,854 Mil.
Total Current Liabilities was $9,193 Mil.
Long-Term Debt was $9,860 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)
=(5724 / 58430) / (5804 / 55783)
=0.09796337 / 0.10404604
=0.9415

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)
=(12846 / 55783) / (10835 / 58430)
=0.76854956 / 0.77152148
=0.9961

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 - (13915 + 17901) / 37332) / (1 - (14620 + 17769) / 37085)
=0.14775528 / 0.12662802
=1.1668

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
=58430 / 55783
=1.0475

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))
=(1861 / (1861 + 17769)) / (1961 / (1961 + 17901))
=0.09480387 / 0.09873125
=0.9602

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)
=(32344 / 58430) / (28854 / 55783)
=0.55355126 / 0.51725436
=1.0702

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)
=((9941 + 10610) / 37332) / ((9860 + 9193) / 37085)
=0.55049287 / 0.51376567
=1.0715

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
=(3147 - 26 - 6210) / 37332
=-0.0827

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.

United Parcel Service Inc (UPS) has a M-score of -2.85 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.

United Parcel Service Inc (UPS) Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00470.881.10020.95821.03560.95991.03880.9753
GMI 1.00771.03740.95531.02831.02590.96811.02421.0071
AQI 1.15990.60720.97050.95141.00051.00130.97061.1296
SGI 1.04511.03610.87981.09381.07191.01921.02421.0504
DEPI 1.04940.99521.02010.94791.01740.97630.9990.9893
SGAI 1.19650.83791.08470.81280.96761.16990.821.0683
LVGI 1.49771.10240.95461.04361.040.98770.98921.052
TATA -0.0215-0.1725-0.0986-0.0149-0.0955-0.1655-0.0815-0.0766
M-score -2.66-3.51-2.99-2.50-2.82-3.32-2.77-2.79

United Parcel Service Inc (UPS) Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.95990.98240.96760.98451.03881.00811.03760.99970.97530.9415
GMI 0.9580.96240.96920.96521.0351.0311.02971.03421.00710.9961
AQI 1.00131.09381.16221.22030.97060.85390.89030.86491.12961.1668
SGI 1.01921.01431.01421.02441.02421.0251.03591.04141.05041.0475
DEPI 0.97630.97820.98320.98730.9990.99981.00110.98440.98930.9602
SGAI 1.10151.13041.18271.12250.81430.82470.84950.86771.06831.0702
LVGI 0.98770.96980.93550.91020.98921.02311.06791.05691.0521.0715
TATA -0.1655-0.1537-0.1631-0.153-0.0815-0.0966-0.0606-0.0759-0.0766-0.0827
M-score -3.31-3.20-3.22-3.11-2.76-2.92-2.72-2.83-2.79-2.85
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