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Apple (NAS:AAPL) Beneish M-Score

: -2.67 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.67 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Apple's Beneish M-Score or its related term are showing as below:

AAPL' s Beneish M-Score Range Over the Past 10 Years
Min: -2.97   Med: -2.69   Max: -2.25
Current: -2.67

During the past 13 years, the highest Beneish M-Score of Apple was -2.25. The lowest was -2.97. And the median was -2.69.


Apple Beneish M-Score Historical Data

The historical data trend for Apple's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Apple Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.87 -2.97 -2.25 -2.66 -2.67

Apple Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23
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 -2.66 -2.82 -2.90 -2.83 -2.67

Competitive Comparison

For the Consumer Electronics subindustry, Apple's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.


Apple Beneish M-Score Distribution

For the Hardware industry and Technology sector, Apple's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Apple's Beneish M-Score falls into.



Apple Beneish M-Score 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 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 * 1.0297+0.528 * 0.9814+0.404 * 0.9438+0.892 * 0.972+0.115 * 1.0004
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0222+4.679 * -0.037342-0.327 * 0.9516
=-2.67

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Sep23) TTM:Last Year (Sep22) TTM:
Total Receivables was $60,985 Mil.
Revenue was 89498 + 81797 + 94836 + 117154 = $383,285 Mil.
Gross Profit was 40427 + 36413 + 41976 + 50332 = $169,148 Mil.
Total Current Assets was $143,566 Mil.
Total Assets was $352,583 Mil.
Property, Plant and Equipment(Net PPE) was $43,715 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,519 Mil.
Selling, General, & Admin. Expense(SGA) was $24,932 Mil.
Total Current Liabilities was $145,308 Mil.
Long-Term Debt & Capital Lease Obligation was $95,281 Mil.
Net Income was 22956 + 19881 + 24160 + 29998 = $96,995 Mil.
Non Operating Income was 47 + -247 + 76 + -258 = $-382 Mil.
Cash Flow from Operations was 21598 + 26380 + 28560 + 34005 = $110,543 Mil.
Total Receivables was $60,932 Mil.
Revenue was 90146 + 82959 + 97278 + 123945 = $394,328 Mil.
Gross Profit was 38095 + 35885 + 42559 + 54243 = $170,782 Mil.
Total Current Assets was $135,405 Mil.
Total Assets was $352,755 Mil.
Property, Plant and Equipment(Net PPE) was $42,117 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,104 Mil.
Selling, General, & Admin. Expense(SGA) was $25,094 Mil.
Total Current Liabilities was $153,982 Mil.
Long-Term Debt & Capital Lease Obligation was $98,959 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(60985 / 383285) / (60932 / 394328)
=0.159111 / 0.154521
=1.0297

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)
=(170782 / 394328) / (169148 / 383285)
=0.433096 / 0.441311
=0.9814

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 - (143566 + 43715) / 352583) / (1 - (135405 + 42117) / 352755)
=0.468831 / 0.496756
=0.9438

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
=383285 / 394328
=0.972

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))
=(11104 / (11104 + 42117)) / (11519 / (11519 + 43715))
=0.208639 / 0.208549
=1.0004

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(24932 / 383285) / (25094 / 394328)
=0.065048 / 0.063637
=1.0222

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((95281 + 145308) / 352583) / ((98959 + 153982) / 352755)
=0.682361 / 0.717044
=0.9516

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
=(96995 - -382 - 110543) / 352583
=-0.037342

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Apple has a M-score of -2.67 suggests that the company is unlikely to be a manipulator.


Apple (NAS:AAPL) Business Description

Address
One Apple Park Way, Cupertino, CA, USA, 95014
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and AirPods, among others. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Fitness, Apple Card, and Apple Pay, among others. Apple's products include internally developed software and semiconductors, and the firm is well known for its integration of hardware, software, semiconductors, and services. Apple's products are distributed online as well as through company-owned stores and third-party retailers.
Executives
Alex Gorsky director JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933
Monica C Lozano director
Deirdre O'brien officer: Senior Vice President ONE APPLE PARK WAY, CUPERTINO CA 95014
Robert A Iger director C/O WALT DISNEY CO, 500 S BUENA VISTA STREET, BURBANK CA 91521-1062
Andrea Jung director C/O APPLE INC, ONE APPLE PARK WAY, CUPERTINO CA 95014
Susan Wagner director C/O BLACKROCK, INC., 40 EAST 52ND STREET, NEW YORK NY 10022
James A Bell director C/O THE DOW CHEMICAL COMPANY, 2211 H.H. DOW WAY, MIDLAND MI 48674
Albert Jr Gore director C/O APPLE INC, 1 INFINITE LOOP, CUPERTINO CA 95014
Ronald D Sugar director 10877 WILSHIRE BLVD., SUITE 1650, LOS ANGELES CA 900274
Katherine L. Adams officer: SVP, General Counsel APPLE INC., 1 INFINITE LOOP, CUPERTINO CA 95014
Luca Maestri officer: Senior Vice President, CFO 1 INFINITE LOOP, CUPERTINO CA 95014
Angela J Ahrendts officer: Senior Vice President 1 INFINITE LOOP, CUPERTINO CA 95014
Jeffrey E Williams officer: COO ONE INFINITE LOOP, CUPERTINO CA 95014
Philip W Schiller officer: Senior Vice President C/O APPLE INC, ONE INFINITE LOOP, CUPERTINO CA 95014
Eduardo H Cue officer: Senior Vice President 1 INFINITE LOOP, CUPERTINO CA 95014