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United Parcel Service Inc (NYSE:UPS)
Beneish M-Score
-2.69 (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 has a M-score of -2.69 suggests that the company is not a manipulator.

UPS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.88   Max: -2.36
Current: -2.69

-3.88
-2.36

During the past 13 years, the highest Beneish M-Score of United Parcel Service Inc was -2.36. The lowest was -3.88. And the median was -2.75.


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 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 * 1.0679+0.528 * 0.9786+0.404 * 1.2275+0.892 * 1.0186+0.115 * 0.9397
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9843+4.679 * -0.0764-0.327 * 1.0345
=-2.69

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $6,111 Mil.
Revenue was 14629 + 14418 + 16054 + 14237 = $59,338 Mil.
Gross Profit was 11426 + 11310 + 12398 + 11091 = $46,225 Mil.
Total Current Assets was $13,123 Mil.
Total Assets was $38,339 Mil.
Property, Plant and Equipment(Net PPE) was $18,251 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,175 Mil.
Selling, General & Admin. Expense(SGA) was $31,553 Mil.
Total Current Liabilities was $9,961 Mil.
Long-Term Debt was $11,550 Mil.
Net Income was 1269 + 1131 + 1331 + 1257 = $4,988 Mil.
Non Operating Income was 8 + 17 + 3 + 4 = $32 Mil.
Cash Flow from Operations was 2023 + 2670 + 1015 + 2176 = $7,884 Mil.
Accounts Receivable was $5,618 Mil.
Revenue was 14095 + 13977 + 15895 + 14290 = $58,257 Mil.
Gross Profit was 11092 + 10835 + 11802 + 10681 = $44,410 Mil.
Total Current Assets was $13,768 Mil.
Total Assets was $37,251 Mil.
Property, Plant and Equipment(Net PPE) was $17,970 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,998 Mil.
Selling, General & Admin. Expense(SGA) was $31,471 Mil.
Total Current Liabilities was $10,303 Mil.
Long-Term Debt was $9,900 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)
=(6111 / 59338) / (5618 / 58257)
=0.10298628 / 0.09643476
=1.0679

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)
=(44410 / 58257) / (46225 / 59338)
=0.76231183 / 0.77901176
=0.9786

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 - (13123 + 18251) / 38339) / (1 - (13768 + 17970) / 37251)
=0.1816688 / 0.14799603
=1.2275

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
=59338 / 58257
=1.0186

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))
=(1998 / (1998 + 17970)) / (2175 / (2175 + 18251))
=0.1000601 / 0.10648193
=0.9397

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)
=(31553 / 59338) / (31471 / 58257)
=0.53175031 / 0.54020976
=0.9843

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)
=((11550 + 9961) / 38339) / ((9900 + 10303) / 37251)
=0.56107358 / 0.54234786
=1.0345

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
=(4988 - 32 - 7884) / 38339
=-0.0764

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 has a M-score of -2.69 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 Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.90351.00470.881.10020.95821.03560.95991.03880.97531.0686
GMI 0.88491.00771.03740.95531.05381.02490.99520.99521.00840.9594
AQI 0.83121.15990.60720.97050.95141.00051.00130.97061.2481.0512
SGI 1.11661.04511.03610.87981.09381.07191.01921.02421.05041.0022
DEPI 1.0291.04940.99521.02010.94791.01740.97630.9990.98930.9333
SGAI 1.18751.19650.83791.08470.7850.96871.17780.84231.06830.9661
LVGI 1.07131.49771.10240.95461.04361.040.98770.98921.05151.102
TATA -0.0444-0.0215-0.1725-0.0986-0.0149-0.0955-0.1655-0.0815-0.0766-0.0679
M-score -2.85-2.66-3.51-2.99-2.48-2.82-3.31-2.79-2.74-2.77

United Parcel Service Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.00811.03760.99970.97530.94150.93291.02411.06861.08341.0679
GMI 0.99711.00071.00531.00840.99720.98340.97060.95940.96570.9786
AQI 0.85390.89030.86491.2481.16681.09011.40821.05121.20451.2275
SGI 1.0251.03591.04141.05041.04751.03031.01551.00221.00641.0186
DEPI 0.99981.00110.98440.98930.96020.94980.94990.93330.94630.9397
SGAI 0.8470.87240.89161.06831.07021.00981.02370.96610.96210.9843
LVGI 1.02311.06791.05691.05151.07151.03451.06431.1021.05131.0345
TATA -0.0966-0.0606-0.0759-0.0766-0.0827-0.1132-0.1023-0.0679-0.062-0.0764
M-score -2.94-2.74-2.85-2.74-2.85-3.04-2.80-2.77-2.64-2.69
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