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United Parcel Service Inc (UPS) (NYSE:UPS)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

UPS' s 10-Year Beneish M-Score Range
Min: -3.62   Max: -2.34
Current: -2.76

-3.62
-2.34

During the past 13 years, the highest Beneish M-Score of United Parcel Service Inc (UPS) was -2.34. The lowest was -3.62. And the median was -2.76.


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 * 1.0376+0.528 * 0.962+0.404 * 0.8903+0.892 * 1.0359+0.115 * 1.0011
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8878+4.679 * -0.0606-0.327 * 1.0679
=-2.76

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $5,845 Mil.
Revenue was 14268 + 13779 + 14976 + 13521 = $56,544 Mil.
Gross Profit was 10718 + 10273 + 13353 + 10236 = $44,580 Mil.
Total Current Assets was $12,341 Mil.
Total Assets was $34,861 Mil.
Property, Plant and Equipment(Net PPE) was $17,787 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,868 Mil.
Selling, General & Admin. Expense(SGA) was $31,198 Mil.
Total Current Liabilities was $8,337 Mil.
Long-Term Debt was $9,940 Mil.
Net Income was 454 + 911 + 1167 + 1097 = $3,629 Mil.
Non Operating Income was 25 + 0 + 10 + 2 = $37 Mil.
Cash Flow from Operations was -435 + 2267 + 2244 + 1629 = $5,705 Mil.
Accounts Receivable was $5,438 Mil.
Revenue was 13507 + 13434 + 14571 + 13071 = $54,583 Mil.
Gross Profit was 10250 + 10086 + 11011 + 10053 = $41,400 Mil.
Total Current Assets was $13,226 Mil.
Total Assets was $36,703 Mil.
Property, Plant and Equipment(Net PPE) was $17,880 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,880 Mil.
Selling, General & Admin. Expense(SGA) was $33,921 Mil.
Total Current Liabilities was $7,183 Mil.
Long-Term Debt was $10,837 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)
=(5845 / 56544) / (5438 / 54583)
=0.10337083 / 0.09962809
=1.0376

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)
=(10273 / 54583) / (10718 / 56544)
=0.75847791 / 0.78841256
=0.962

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 - (12341 + 17787) / 34861) / (1 - (13226 + 17880) / 36703)
=0.13576776 / 0.15249435
=0.8903

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
=56544 / 54583
=1.0359

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))
=(1880 / (1880 + 17880)) / (1868 / (1868 + 17787))
=0.0951417 / 0.09503943
=1.0011

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)
=(31198 / 56544) / (33921 / 54583)
=0.55174731 / 0.62145723
=0.8878

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)
=((9940 + 8337) / 34861) / ((10837 + 7183) / 36703)
=0.52428215 / 0.49096804
=1.0679

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
=(3629 - 37 - 5705) / 34861
=-0.0606

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 -2.76 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 1.07330.96210.87571.20110.76561.08670.94440.95260.95991.0388
GMI 1.06830.9951.03150.86451.03740.95531.02831.02590.99680.9666
AQI 1.09641.29860.83781.15990.60720.97050.95141.00051.00130.9706
SGI 1.09251.1641.11661.04511.03610.87981.09381.07191.01921.0242
DEPI 1.00771.02431.0291.04940.99521.02010.94791.01740.97630.999
SGAI 0.99050.92490.97131.46290.83791.08470.92030.97921.02090.8472
LVGI 0.98410.95771.04991.49771.10240.95461.04361.040.98770.9892
TATA -0.063-0.0575-0.0444-0.0215-0.1725-0.0986-0.0104-0.0955-0.1655-0.0815
M-score -2.54-2.49-2.76-2.60-3.62-3.00-2.51-2.90-3.28-2.80

United Parcel Service Inc (UPS) Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.91590.8890.96780.95990.98240.96760.98451.03881.00811.0376
GMI 1.02821.011.00140.99681.00141.00851.01470.96660.96310.962
AQI 1.02660.97860.87731.00131.09381.16221.22030.97060.85390.8903
SGI 1.06471.04731.0261.01921.01431.01421.02441.02421.0251.0359
DEPI 1.00160.98550.98370.97630.97820.98320.98730.9990.99981.0011
SGAI 0.99051.00551.00521.08341.04861.01240.98270.79830.83110.8878
LVGI 0.98921.00241.03950.98770.96980.93550.91020.98921.02311.0679
TATA -0.1174-0.0996-0.0889-0.1655-0.1537-0.1631-0.153-0.0815-0.0966-0.0606
M-score -3.02-3.01-2.97-3.29-3.16-3.17-3.06-2.80-2.96-2.76
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