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United Parcel Service Inc (UPS) (NYSE:UPS)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

UPS' s 10-Year Beneish M-Score Range
Min: -3.65   Max: -0.53
Current: -2.94

-3.65
-0.53

During the past 13 years, the highest Beneish M-Score of United Parcel Service Inc (UPS) was -0.53. The lowest was -3.65. And the median was -2.82.


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 * 1.0081+0.528 * 0.997+0.404 * 0.8539+0.892 * 1.025+0.115 * 0.9998
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8518+4.679 * -0.0966-0.327 * 1.0231
=-2.94

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $5,804 Mil.
Revenue was 13779 + 14976 + 13521 + 13507 = $55,783 Mil.
Gross Profit was 10273 + 13353 + 10236 + 10475 = $44,337 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 $29,804 Mil.
Total Current Liabilities was $9,193 Mil.
Long-Term Debt was $9,860 Mil.
Net Income was 911 + 1167 + 1097 + 1071 = $4,246 Mil.
Non Operating Income was 0 + 10 + 2 + 3 = $15 Mil.
Cash Flow from Operations was 2267 + 2244 + 1629 + 1673 = $7,813 Mil.
Accounts Receivable was $5,617 Mil.
Revenue was 13434 + 14571 + 13071 + 13349 = $54,425 Mil.
Gross Profit was 10086 + 12909 + 9833 + 10299 = $43,127 Mil.
Total Current Assets was $14,481 Mil.
Total Assets was $38,005 Mil.
Property, Plant and Equipment(Net PPE) was $17,888 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,873 Mil.
Selling, General & Admin. Expense(SGA) was $34,137 Mil.
Total Current Liabilities was $8,034 Mil.
Long-Term Debt was $11,051 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)
=(5804 / 55783) / (5617 / 54425)
=0.10404604 / 0.10320625
=1.0081

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)
=(13353 / 54425) / (10273 / 55783)
=0.79241158 / 0.79481204
=0.997

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 - (14620 + 17769) / 37085) / (1 - (14481 + 17888) / 38005)
=0.12662802 / 0.14829628
=0.8539

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
=55783 / 54425
=1.025

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))
=(1873 / (1873 + 17888)) / (1861 / (1861 + 17769))
=0.09478265 / 0.09480387
=0.9998

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)
=(29804 / 55783) / (34137 / 54425)
=0.53428464 / 0.62723013
=0.8518

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)
=((9860 + 9193) / 37085) / ((11051 + 8034) / 38005)
=0.51376567 / 0.50217077
=1.0231

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
=(4246 - 15 - 7813) / 37085
=-0.0966

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 -2.94 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 1.07331.18870.76561.08670.94440.95260.95991.0388
GMI 1.06471.00771.03740.95531.02831.02590.96810.9953
AQI 0.89631.15990.60720.97050.95141.00051.00130.9706
SGI 1.09251.04511.03610.87981.09381.07191.01921.0242
DEPI 1.04911.04940.99521.02010.94791.01740.97630.999
SGAI 0.99451.19650.83791.08470.81280.96761.16990.8472
LVGI 11.49771.10240.95461.04361.040.98770.9892
TATA -0.063-0.0215-0.1725-0.0986-0.0149-0.0955-0.1655-0.0815
M-score -2.63-2.49-3.62-3.00-2.51-2.90-3.32-2.79

United Parcel Service Inc (UPS) Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.95260.91590.8890.96780.95990.98240.96760.98451.03881.0081
GMI 1.02591.02091.011.00680.9580.96240.96420.96021.00060.997
AQI 1.00051.02660.97860.87731.00131.09381.16221.22030.97060.8539
SGI 1.07191.06471.04731.0261.01921.01431.01421.02441.02421.025
DEPI 1.01741.00160.98550.98370.97630.97820.98320.98730.9990.9998
SGAI 1.03491.01640.98991.05781.10151.13041.18271.12250.84140.8518
LVGI 1.040.98921.00241.03950.98770.96980.93550.91020.98921.0231
TATA -0.0955-0.1182-0.1012-0.0911-0.1655-0.1537-0.1631-0.153-0.0815-0.0966
M-score -2.91-3.03-3.02-2.98-3.31-3.20-3.23-3.11-2.78-2.94
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