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* 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.

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

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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:

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

This Year (Dec18) TTM:

Last Year (Dec17) TTM:

Accounts Receivable was $18,077 Mil. Revenue was 84310 + 62900 + 53265 + 61137 = $261,612 Mil. Gross Profit was 32031 + 24084 + 20421 + 23422 = $99,958 Mil. Total Current Assets was $140,828 Mil. Total Assets was $373,719 Mil. Property, Plant and Equipment(Net PPE) was $39,597 Mil. Depreciation, Depletion and Amortization(DDA) was $11,553 Mil. Selling, General, & Admin. Expense(SGA) was $17,257 Mil. Total Current Liabilities was $108,283 Mil. Long-Term Debt & Capital Lease Obligation was $92,989 Mil. Net Income was 19965 + 14125 + 11519 + 13822 = $59,431 Mil. Non Operating Income was 143 + -140 + 100 + -439 = $-336 Mil. Cash Flow from Operations was 26690 + 19523 + 14488 + 15130 = $75,831 Mil.

Accounts Receivable was $23,440 Mil. Revenue was 88293 + 52579 + 45408 + 52896 = $239,176 Mil. Gross Profit was 33912 + 19931 + 17488 + 20591 = $91,922 Mil. Total Current Assets was $143,810 Mil. Total Assets was $406,794 Mil. Property, Plant and Equipment(Net PPE) was $33,679 Mil. (DDA) was $9,915 Mil. Selling, General, & Admin. Expense(SGA) was $15,546 Mil. Total Current Liabilities was $115,788 Mil. Long-Term Debt & Capital Lease Obligation was $103,922 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.

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.

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.

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.

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.

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.

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

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

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 -2.90 suggests that the company will not be a manipulator.

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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 & Capital Lease Obligation Net Income Non Operating Income Cash Flow from Operations

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