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Apple Inc  (NAS:AAPL) Beneish M-Score: -2.56 (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.

Apple Inc has a M-score of -2.56 suggests that the company is not a manipulator.

NAS:AAPL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.43   Max: -1.49
Current: -2.56

-3.43
-1.49

During the past 13 years, the highest Beneish M-Score of Apple Inc was -1.49. The lowest was -3.43. And the median was -2.56.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Apple Inc Annual Data

Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.76 -2.69 -2.97 -2.82 -2.56

Apple Inc Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.82 -2.69 -2.80 -2.67 -2.56

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Apple 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 * 1.0673+0.528 * 1.0158+0.404 * 0.9716+0.892 * 1.063+0.115 * 1.2114
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0114+4.679 * -0.0403-0.327 * 1.099
=-2.56

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep17) TTM:Last Year (Sep16) TTM:
Accounts Receivable was $17,874 Mil.
Revenue was 52579 + 45408 + 52896 + 78351 = $229,234 Mil.
Gross Profit was 19931 + 17488 + 20591 + 30176 = $88,186 Mil.
Total Current Assets was $128,645 Mil.
Total Assets was $375,319 Mil.
Property, Plant and Equipment(Net PPE) was $33,783 Mil.
Depreciation, Depletion and Amortization(DDA) was $10,157 Mil.
Selling, General, & Admin. Expense(SGA) was $15,261 Mil.
Total Current Liabilities was $100,814 Mil.
Long-Term Debt & Capital Lease Obligation was $97,207 Mil.
Net Income was 10714 + 8717 + 11029 + 17891 = $48,351 Mil.
Non-Recurring Items was 95 + -185 + -165 + 122 = $-133 Mil.
Cash Flow from Operations was 15656 + 8363 + 12523 + 27056 = $63,598 Mil.
Accounts Receivable was $15,754 Mil.
Revenue was 46852 + 42358 + 50557 + 75872 = $215,639 Mil.
Gross Profit was 17813 + 16106 + 19921 + 30423 = $84,263 Mil.
Total Current Assets was $106,869 Mil.
Total Assets was $321,686 Mil.
Property, Plant and Equipment(Net PPE) was $27,010 Mil.
(DDA) was $10,505 Mil.
Selling, General, & Admin. Expense(SGA) was $14,194 Mil.
Total Current Liabilities was $79,006 Mil.
Long-Term Debt & Capital Lease Obligation was $75,427 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(17874 / 229234) / (15754 / 215639)
=0.07797273 / 0.07305729
=1.0673

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)
=(84263 / 215639) / (88186 / 229234)
=0.39075956 / 0.3846986
=1.0158

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (128645 + 33783) / 375319) / (1 - (106869 + 27010) / 321686)
=0.56722681 / 0.58382087
=0.9716

4. SGI = Sales Growth Index

Ratio of Revenue 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
=229234 / 215639
=1.063

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(10505 / (10505 + 27010)) / (10157 / (10157 + 33783))
=0.28002132 / 0.23115612
=1.2114

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(15261 / 229234) / (14194 / 215639)
=0.06657389 / 0.06582297
=1.0114

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)
=((97207 + 100814) / 375319) / ((75427 + 79006) / 321686)
=0.52760718 / 0.48007374
=1.099

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
=(48351 - -133 - 63598) / 375319
=-0.0403

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.

Apple Inc has a M-score of -2.56 suggests that the company will not be a manipulator.


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