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Adobe (ADBE) Beneish M-Score : -2.53 (As of May. 26, 2024)


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What is Adobe Beneish M-Score?

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 -2.53 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ADBE' s Beneish M-Score Range Over the Past 10 Years
Min: -2.97   Med: -2.7   Max: -2.43
Current: -2.53

During the past 13 years, the highest Beneish M-Score of Adobe was -2.43. The lowest was -2.97. And the median was -2.70.


Adobe Beneish M-Score Historical Data

The historical data trend for Adobe'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.

Adobe Beneish M-Score Chart

Adobe Annual Data
Trend Nov14 Nov15 Nov16 Nov17 Nov18 Nov19 Nov20 Nov21 Nov22 Nov23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.71 -2.60 -2.60 -2.95 -2.70

Adobe Quarterly Data
May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24
Beneish M-Score Get a 7-Day Free Trial 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 -2.97 -2.97 -2.93 -2.70 -2.53

Competitive Comparison of Adobe's Beneish M-Score

For the Software - Infrastructure subindustry, Adobe'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.


Adobe's Beneish M-Score Distribution in the Software Industry

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

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



Adobe 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 Adobe 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 * 1.0312+0.528 * 0.9952+0.404 * 0.9527+0.892 * 1.1076+0.115 * 0.9811
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9656+4.679 * -0.035442-0.327 * 0.9736
=-2.53

* 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 (Feb24) TTM:Last Year (Feb23) TTM:
Total Receivables was $2,057 Mil.
Revenue was 5182 + 5048 + 4890 + 4816 = $19,936 Mil.
Gross Profit was 4592 + 4414 + 4310 + 4244 = $17,560 Mil.
Total Current Assets was $10,008 Mil.
Total Assets was $28,751 Mil.
Property, Plant and Equipment(Net PPE) was $2,354 Mil.
Depreciation, Depletion and Amortization(DDA) was $872 Mil.
Selling, General, & Admin. Expense(SGA) was $6,836 Mil.
Total Current Liabilities was $9,537 Mil.
Long-Term Debt & Capital Lease Obligation was $2,516 Mil.
Net Income was 620 + 1483 + 1403 + 1295 = $4,801 Mil.
Non Operating Income was -912 + -176 + 73 + 52 = $-963 Mil.
Cash Flow from Operations was 1174 + 1597 + 1873 + 2139 = $6,783 Mil.
Total Receivables was $1,801 Mil.
Revenue was 4655 + 4525 + 4433 + 4386 = $17,999 Mil.
Gross Profit was 4087 + 3957 + 3887 + 3847 = $15,778 Mil.
Total Current Assets was $8,342 Mil.
Total Assets was $26,667 Mil.
Property, Plant and Equipment(Net PPE) was $2,369 Mil.
Depreciation, Depletion and Amortization(DDA) was $855 Mil.
Selling, General, & Admin. Expense(SGA) was $6,392 Mil.
Total Current Liabilities was $7,437 Mil.
Long-Term Debt & Capital Lease Obligation was $4,045 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)
=(2057 / 19936) / (1801 / 17999)
=0.10318 / 0.100061
=1.0312

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)
=(15778 / 17999) / (17560 / 19936)
=0.876604 / 0.880819
=0.9952

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 - (10008 + 2354) / 28751) / (1 - (8342 + 2369) / 26667)
=0.570032 / 0.598343
=0.9527

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
=19936 / 17999
=1.1076

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))
=(855 / (855 + 2369)) / (872 / (872 + 2354))
=0.265199 / 0.270304
=0.9811

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)
=(6836 / 19936) / (6392 / 17999)
=0.342897 / 0.355131
=0.9656

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)
=((2516 + 9537) / 28751) / ((4045 + 7437) / 26667)
=0.41922 / 0.43057
=0.9736

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
=(4801 - -963 - 6783) / 28751
=-0.035442

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.

Adobe has a M-score of -2.53 suggests that the company is unlikely to be a manipulator.


Adobe (ADBE) Business Description

Address
345 Park Avenue, San Jose, CA, USA, 95110-2704
Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering, measuring, optimizing and engaging with compelling content multiple operating systems, devices and media. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).
Executives
Mark S. Garfield officer: VP, CAO & Corp. Controller 345 PARK AVENUE, SAN JOSE CA 95110-2704
Amy Banse director 345 PARK AVENUE, SAN JOSE CA 95110
David Wadhwani officer: SVP & GM, Digital Media ADOBE INC., 345 PARK AVE, SAN JOSE CA 95110
Shantanu Narayen director, officer: President and CEO 345 PARK AVENUE, SAN JOSE CA 95110
Daniel Durn officer: EVP and CFO C/O APPLIED MATERIALS, INC., 3050 BOWERS AVENUE, P.O. BOX 58039, SANTA CLARA CA 95052-8039
Scott Belsky officer: EVP, Chief Product Officer 345 PARK AVENUE, SAN JOSE CA 95110
Cristiano R Amon director 5775 MOREHOUSE DRIVE, SAN DIEGO CA 92121
John E Warnock director, other: Co-Chairman of the Board C/O ADOBE SYSTEMS INC, 345 PARK AVENUE P O BOX 2704, SAN JOSE CA 95110-2704
Dana Rao officer: EVP, Gen. Counsel & Secretary 345 PARK AVE, SAN JOSE CA 95110
Ann Lewnes officer: SVP, Chief Marketing Officer 345 PARK AVENUE, SAN JOSE CA 95110
David A Ricks director LILLY CORPORATE CENTER, INDIANAPOLIS IN 46285
M. Brett Biggs director 702 SW 8TH STREET, BENTONVILLE AR 72716
Laura Desmond director 345 PARK AVENUE, SAN JOSE CA 95110
Spencer Adam Neumann director SIERRA INCOME CORPORATION, 375 PARK AVE., SUITE 3304, NEW YORK NY 10152
Gloria Chen officer: EVP, Strategy & Growth 345 PARK AVENUE, SAN JOSE CA 95110