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Nike Inc  (NYSE:NKE) Beneish M-Score: -2.33 (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.

Nike Inc has a M-score of -2.33 suggests that the company is not a manipulator.

NYSE:NKE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -1.34
Current: -2.33

-3.03
-1.34

During the past 13 years, the highest Beneish M-Score of Nike Inc was -1.34. The lowest was -3.03. And the median was -2.52.


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.

Nike Inc Annual Data

May08 May09 May10 May11 May12 May13 May14 May15 May16 May17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.72 -2.37 -2.74 -2.40 -2.27

Nike Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 -2.30 -2.43 -2.33 -2.27 -2.33

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 Nike 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 * 1.0552+0.528 * 1.0369+0.404 * 1.0064+0.892 * 1.0405+0.115 * 1.0623
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9373+4.679 * 0.0168-0.327 * 1.1588
=-2.33

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

This Year (Aug17) TTM:Last Year (Aug16) TTM:
Accounts Receivable was $3,871 Mil.
Revenue was 9070 + 8677 + 8432 + 8180 = $34,359 Mil.
Gross Profit was 3962 + 3823 + 3750 + 3616 = $15,151 Mil.
Total Current Assets was $16,192 Mil.
Total Assets was $23,647 Mil.
Property, Plant and Equipment(Net PPE) was $4,086 Mil.
Depreciation, Depletion and Amortization(DDA) was $721 Mil.
Selling, General, & Admin. Expense(SGA) was $10,522 Mil.
Total Current Liabilities was $6,056 Mil.
Long-Term Debt & Capital Lease Obligation was $3,472 Mil.
Net Income was 950 + 1008 + 1141 + 842 = $3,941 Mil.
Non-Recurring Items was -18 + 28 + 88 + 18 = $116 Mil.
Cash Flow from Operations was 575 + 889 + 1067 + 896 = $3,427 Mil.
Accounts Receivable was $3,526 Mil.
Revenue was 9061 + 8244 + 8032 + 7686 = $33,023 Mil.
Gross Profit was 4123 + 3786 + 3689 + 3501 = $15,099 Mil.
Total Current Assets was $14,589 Mil.
Total Assets was $21,156 Mil.
Property, Plant and Equipment(Net PPE) was $3,572 Mil.
(DDA) was $677 Mil.
Selling, General, & Admin. Expense(SGA) was $10,789 Mil.
Total Current Liabilities was $5,363 Mil.
Long-Term Debt & Capital Lease Obligation was $1,993 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)
=(3871 / 34359) / (3526 / 33023)
=0.11266335 / 0.10677407
=1.0552

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)
=(15099 / 33023) / (15151 / 34359)
=0.45722678 / 0.44096161
=1.0369

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 - (16192 + 4086) / 23647) / (1 - (14589 + 3572) / 21156)
=0.1424705 / 0.1415674
=1.0064

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
=34359 / 33023
=1.0405

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))
=(677 / (677 + 3572)) / (721 / (721 + 4086))
=0.15933161 / 0.1499896
=1.0623

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)
=(10522 / 34359) / (10789 / 33023)
=0.30623708 / 0.32671169
=0.9373

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)
=((3472 + 6056) / 23647) / ((1993 + 5363) / 21156)
=0.40292638 / 0.34770278
=1.1588

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
=(3941 - 116 - 3427) / 23647
=0.0168

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.

Nike Inc has a M-score of -2.33 suggests that the company will not be a manipulator.


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