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Advance Auto Parts Inc  (NYSE:AAP) Beneish M-Score: -2.18 (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.

Advance Auto Parts Inc has a M-score of -2.18 signals that the company is a manipulator.

NYSE:AAP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.95   Max: -0.43
Current: -2.18

-3.95
-0.43

During the past 13 years, the highest Beneish M-Score of Advance Auto Parts Inc was -0.43. The lowest was -3.95. And the median was -2.66.


Advance Auto Parts Inc  (NYSE:AAP) Beneish M-Score 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.

Advance Auto Parts Inc Annual Data

Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -0.43 -2.56 -2.44 -2.60 -2.71

Advance Auto Parts Inc Quarterly Data

Jun14 Sep14 Dec14 Apr15 Jun15 Sep15 Dec15 Apr16 Jun16 Sep16 Dec16 Apr17 Jun17 Sep17 Dec17 Apr18 Jun18 Sep18 Dec18 Apr19
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 -2.70 -2.66 -2.67 -2.71 -2.18

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.


Advance Auto Parts Inc  (NYSE:AAP) Beneish M-Score Distribution

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



Advance Auto Parts Inc  (NYSE:AAP) 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 Advance Auto Parts 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 * 1.0739+0.528 * 0.9922+0.404 * 1.8672+0.892 * 1.0323+0.115 * 1.0287
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0075+4.679 * -0.0394-0.327 * 0.8669
=-2.18

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

This Year (Apr19) TTM:Last Year (Apr18) TTM:
Accounts Receivable was $691 Mil.
Revenue was 2952.036 + 2105.072 + 2274.982 + 2326.652 = $9,659 Mil.
Gross Profit was 1304.612 + 928.644 + 1006.927 + 1011.559 = $4,252 Mil.
Total Current Assets was $5,782 Mil.
Total Assets was $11,082 Mil.
Property, Plant and Equipment(Net PPE) was $1,363 Mil.
Depreciation, Depletion and Amortization(DDA) was $236 Mil.
Selling, General, & Admin. Expense(SGA) was $3,638 Mil.
Total Current Liabilities was $4,299 Mil.
Long-Term Debt & Capital Lease Obligation was $747 Mil.
Net Income was 142.5 + 53.442 + 115.843 + 117.836 = $430 Mil.
Non Operating Income was -2.238 + -1.421 + 5.755 + 2.785 = $5 Mil.
Cash Flow from Operations was 204.542 + 129.525 + 237.535 + 289.998 = $862 Mil.
Accounts Receivable was $623 Mil.
Revenue was 2873.848 + 2036.986 + 2182.233 + 2263.727 = $9,357 Mil.
Gross Profit was 1272.284 + 873.569 + 947.708 + 993.088 = $4,087 Mil.
Total Current Assets was $5,618 Mil.
Total Assets was $8,615 Mil.
Property, Plant and Equipment(Net PPE) was $1,358 Mil.
(DDA) was $244 Mil.
Selling, General, & Admin. Expense(SGA) was $3,498 Mil.
Total Current Liabilities was $3,480 Mil.
Long-Term Debt & Capital Lease Obligation was $1,045 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)
=(690.93 / 9658.742) / (623.245 / 9356.794)
=0.07153416 / 0.06660882
=1.0739

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)
=(4086.649 / 9356.794) / (4251.742 / 9658.742)
=0.4367574 / 0.44019625
=0.9922

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 - (5781.838 + 1363.128) / 11081.511) / (1 - (5617.516 + 1358.397) / 8614.953)
=0.3552354 / 0.19025525
=1.8672

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
=9658.742 / 9356.794
=1.0323

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))
=(243.522 / (243.522 + 1358.397)) / (236.377 / (236.377 + 1363.128))
=0.15201892 / 0.14778134
=1.0287

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)
=(3637.767 / 9658.742) / (3497.976 / 9356.794)
=0.37662948 / 0.37384343
=1.0075

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)
=((746.767 + 4298.877) / 11081.511) / ((1044.755 + 3480.139) / 8614.953)
=0.45532094 / 0.52523722
=0.8669

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
=(429.621 - 4.881 - 861.6) / 11081.511
=-0.0394

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.

Advance Auto Parts Inc has a M-score of -2.18 signals that the company is likely to be a manipulator.


Advance Auto Parts Inc  (NYSE:AAP) Beneish M-Score Headlines

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