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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: -3.59   Max: -2.3
Current: -2.85

-3.59
-2.3

During the past 13 years, the highest Beneish M-Score of United Parcel Service Inc (UPS) was -2.30. The lowest was -3.59. And the median was -2.78.


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 * 0.9997+0.528 * 1.0057+0.404 * 0.8649+0.892 * 1.0414+0.115 * 0.9844
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8948+4.679 * -0.0759-0.327 * 1.0569
=-2.85

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $5,822 Mil.
Revenue was 14290 + 14268 + 13779 + 14976 = $57,313 Mil.
Gross Profit was 10681 + 10718 + 10273 + 13353 = $45,025 Mil.
Total Current Assets was $13,318 Mil.
Total Assets was $35,906 Mil.
Property, Plant and Equipment(Net PPE) was $17,843 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,893 Mil.
Selling, General & Admin. Expense(SGA) was $31,454 Mil.
Total Current Liabilities was $9,096 Mil.
Long-Term Debt was $9,858 Mil.
Net Income was 1214 + 454 + 911 + 1167 = $3,746 Mil.
Non Operating Income was 2 + 25 + 0 + 10 = $37 Mil.
Cash Flow from Operations was 2359 + -435 + 2267 + 2244 = $6,435 Mil.
Accounts Receivable was $5,592 Mil.
Revenue was 13521 + 13507 + 13434 + 14571 = $55,033 Mil.
Gross Profit was 10236 + 10250 + 10086 + 12909 = $43,481 Mil.
Total Current Assets was $13,758 Mil.
Total Assets was $37,476 Mil.
Property, Plant and Equipment(Net PPE) was $17,992 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,876 Mil.
Selling, General & Admin. Expense(SGA) was $33,755 Mil.
Total Current Liabilities was $7,821 Mil.
Long-Term Debt was $10,897 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)
=(5822 / 57313) / (5592 / 55033)
=0.10158254 / 0.10161176
=0.9997

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)
=(10718 / 55033) / (10681 / 57313)
=0.79008958 / 0.78559838
=1.0057

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 - (13318 + 17843) / 35906) / (1 - (13758 + 17992) / 37476)
=0.13215062 / 0.15279112
=0.8649

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
=57313 / 55033
=1.0414

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))
=(1876 / (1876 + 17992)) / (1893 / (1893 + 17843))
=0.09442319 / 0.09591609
=0.9844

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)
=(31454 / 57313) / (33755 / 55033)
=0.54881092 / 0.61335926
=0.8948

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)
=((9858 + 9096) / 35906) / ((10897 + 7821) / 37476)
=0.52787835 / 0.49946633
=1.0569

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
=(3746 - 37 - 6435) / 35906
=-0.0759

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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.17870.95690.90351.00470.881.10020.95821.03560.95991.0388
GMI 1.06470.9950.88491.00771.03740.95531.02831.02590.96810.9953
AQI 0.89631.30880.83121.15990.60720.97050.95141.00051.00130.9706
SGI 1.09251.1641.11661.04511.03610.87981.09381.07191.01921.0242
DEPI 1.04911.02431.0291.04940.99521.02010.94791.01740.97630.999
SGAI 0.99450.92491.18751.19650.83791.08470.81280.96761.16990.8472
LVGI 10.93851.07131.49771.10240.95461.04361.040.98770.9892
TATA -0.063-0.058-0.0444-0.0215-0.1725-0.0986-0.0149-0.0955-0.1655-0.0815
M-score -2.53-2.49-2.85-2.66-3.51-2.99-2.50-2.82-3.32-2.79

United Parcel Service Inc (UPS) Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.94440.99750.95990.98240.96760.98451.03881.00811.03760.9997
GMI 1.011.00680.9580.96240.96920.96521.00581.00211.0011.0057
AQI 0.97860.87731.00131.09381.16221.22030.97060.85390.89030.8649
SGI 1.04731.0261.01921.01431.01421.02441.02421.0251.03591.0414
DEPI 0.98550.98370.97630.97820.98320.98730.9990.99981.00110.9844
SGAI 0.98991.05781.10151.13041.18271.12250.84140.85180.87620.8948
LVGI 1.00241.03950.98770.96980.93550.91020.98921.02311.06791.0569
TATA -0.1012-0.0911-0.1655-0.1537-0.1631-0.153-0.0815-0.0966-0.0606-0.0759
M-score -2.97-2.96-3.31-3.20-3.22-3.11-2.78-2.94-2.74-2.85
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