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United Parcel Service Inc (NYSE:UPS)
Beneish M-Score
-2.64 (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 -2.64 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: -2.64

-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 -2.77.


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 * 1.0834+0.528 * 0.9657+0.404 * 1.2045+0.892 * 1.0064+0.115 * 0.9463
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9621+4.679 * -0.062-0.327 * 1.0513
=-2.64

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $6,241 Mil.
Revenue was 14418 + 16054 + 14237 + 14095 = $58,804 Mil.
Gross Profit was 11310 + 12398 + 11091 + 11092 = $45,891 Mil.
Total Current Assets was $13,912 Mil.
Total Assets was $39,168 Mil.
Property, Plant and Equipment(Net PPE) was $18,285 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,130 Mil.
Selling, General & Admin. Expense(SGA) was $31,317 Mil.
Total Current Liabilities was $11,098 Mil.
Long-Term Debt was $11,569 Mil.
Net Income was 1131 + 1331 + 1257 + 1230 = $4,949 Mil.
Non Operating Income was 17 + 3 + 4 + 4 = $28 Mil.
Cash Flow from Operations was 2670 + 1015 + 2176 + 1488 = $7,349 Mil.
Accounts Receivable was $5,724 Mil.
Revenue was 13977 + 15895 + 14290 + 14268 = $58,430 Mil.
Gross Profit was 10835 + 11802 + 10681 + 10718 = $44,036 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.



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)
=(6241 / 58804) / (5724 / 58430)
=0.10613224 / 0.09796337
=1.0834

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)
=(44036 / 58430) / (45891 / 58804)
=0.75365394 / 0.78040609
=0.9657

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 - (13912 + 18285) / 39168) / (1 - (13915 + 17901) / 37332)
=0.17797692 / 0.14775528
=1.2045

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
=58804 / 58430
=1.0064

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))
=(1961 / (1961 + 17901)) / (2130 / (2130 + 18285))
=0.09873125 / 0.10433505
=0.9463

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)
=(31317 / 58804) / (32344 / 58430)
=0.53256581 / 0.55355126
=0.9621

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)
=((11569 + 11098) / 39168) / ((9941 + 10610) / 37332)
=0.57871221 / 0.55049287
=1.0513

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
=(4949 - 28 - 7349) / 39168
=-0.062

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 -2.64 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 1.03150.86451.03740.95531.02831.05030.99520.99521.00840.9594
AQI 0.83121.15990.60720.97050.95141.00051.00130.97061.12961.1614
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 0.97131.46290.83791.08470.92030.82631.17780.84231.06830.9661
LVGI 1.07131.49771.10240.95461.04361.040.98770.98921.0521.1015
TATA -0.0444-0.0215-0.1725-0.0986-0.0104-0.0955-0.1655-0.0815-0.0766-0.0679
M-score -2.74-2.78-3.51-2.99-2.49-2.78-3.31-2.79-2.79-2.72

United Parcel Service Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.03881.00811.03760.99970.97530.94150.93291.02411.06861.0834
GMI 0.99520.99130.98970.98911.00840.99720.98340.97060.95940.9657
AQI 0.97060.85390.89030.86491.12961.16681.09011.40821.16141.2045
SGI 1.02421.0251.03591.04141.05041.04751.03031.01551.00221.0064
DEPI 0.9990.99981.00110.98440.98930.96020.94980.94990.93330.9463
SGAI 0.79250.82580.88430.91011.06831.07021.00981.02370.96610.9621
LVGI 0.98921.02311.06791.05691.0521.07151.03451.06431.10151.0513
TATA -0.0815-0.0966-0.0606-0.0759-0.0766-0.0827-0.1132-0.1023-0.0679-0.062
M-score -2.78-2.94-2.75-2.86-2.79-2.85-3.04-2.80-2.72-2.64
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