Akamai Technologies (WBO:AKAM) Beneish M-Score : -2.73 (As of May. 01, 2024)

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What is Akamai Technologies 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 -2.73 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WBO:AKAM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.32 Med: -2.85 Max: -2.58
Current: -2.73

During the past 13 years, the highest Beneish M-Score of Akamai Technologies was -2.58. The lowest was -3.32. And the median was -2.85.

Akamai Technologies Beneish M-Score Historical Data

The historical data trend for Akamai Technologies'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.

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Akamai Technologies Beneish M-Score Chart

Akamai Technologies Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.65

-2.58

-2.84

-2.88

-2.73

Akamai Technologies Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.88	-2.94	-2.88	-2.70	-2.73

Competitive Comparison of Akamai Technologies's Beneish M-Score

For the Software - Infrastructure subindustry, Akamai Technologies'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.

Akamai Technologies's Beneish M-Score Distribution in the Software Industry

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

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

Akamai Technologies 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 Akamai Technologies for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0082

0.528 * 1.0223

0.404 * 1.1296

0.892 * 1.0274

0.115 * 1.1624

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0196

4.679 * -0.073765

0.327 * 1.1373

-2.76

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €664 Mil.
Revenue was 912.431 + 904.659 + 863.67 + 855.262 = €3,536 Mil.
Gross Profit was 551.686 + 545.717 + 519.138 + 517.793 = €2,134 Mil.
Total Current Assets was €1,655 Mil.
Total Assets was €9,078 Mil.
Property, Plant and Equipment(Net PPE) was €2,508 Mil.
Depreciation, Depletion and Amortization(DDA) was €530 Mil.
Selling, General, & Admin. Expense(SGA) was €981 Mil.
Total Current Liabilities was €767 Mil.
Long-Term Debt & Capital Lease Obligation was €3,955 Mil.
Net Income was 147.788 + 150.428 + 118.897 + 90.697 = €508 Mil.
Non Operating Income was -5.474 + -7.473 + -11.082 + -48.371 = €-72 Mil.
Cash Flow from Operations was 356.89 + 336.792 + 338.105 + 218.088 = €1,250 Mil.

Total Receivables was €641 Mil.
Revenue was 875.823 + 890.715 + 854.552 + 820.511 = €3,442 Mil.
Gross Profit was 537.902 + 540.8 + 526.622 + 518.373 = €2,124 Mil.
Total Current Assets was €1,859 Mil.
Total Assets was €7,838 Mil.
Property, Plant and Equipment(Net PPE) was €2,222 Mil.
Depreciation, Depletion and Amortization(DDA) was €565 Mil.
Selling, General, & Admin. Expense(SGA) was €937 Mil.
Total Current Liabilities was €773 Mil.
Long-Term Debt & Capital Lease Obligation was €2,812 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)
	=	(664.185 / 3536.022)	/	(641.17 / 3441.601)
	=	0.187834	/	0.1863
	=	1.0082

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)
	=	(2123.697 / 3441.601)	/	(2134.334 / 3536.022)
	=	0.617067	/	0.603597
	=	1.0223

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 - (1655.052 + 2507.608) / 9078.334)	/	(1 - (1859.267 + 2221.755) / 7838.41)
	=	0.541473	/	0.479356
	=	1.1296

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
	=	3536.022	/	3441.601
	=	1.0274

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))
	=	(564.692 / (564.692 + 2221.755))	/	(529.51 / (529.51 + 2507.608))
	=	0.202657	/	0.174346
	=	1.1624

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)
	=	(981.193 / 3536.022)	/	(936.599 / 3441.601)
	=	0.277485	/	0.27214
	=	1.0196

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)
	=	((3955.053 + 766.647) / 9078.334)	/	((2811.726 + 773.011) / 7838.41)
	=	0.520106	/	0.45733
	=	1.1373

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
	=	(507.81 - -72.4	-	1249.875)	/	9078.334
	=	-0.073765

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.

Akamai Technologies has a M-score of -2.76 suggests that the company is unlikely to be a manipulator.

Akamai Technologies Beneish M-Score Related Terms

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Akamai Technologies (WBO:AKAM) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

AKAM:USA AK3:Germany AK3:Germany AK3:Germany A1KA34:Brazil

Address

145 Broadway, Cambridge, MA, USA, 02142

Website

https://www.akamai.com

Akamai operates a content delivery network, or CDN, which entails locating servers at the edges of networks so its customers, which store content on Akamai servers, can reach their own customers faster, more securely, and with better quality. Akamai has over 325,000 servers distributed over 4,100 points of presence in more than 1,000 cities worldwide. Its customers generally include media companies, which stream video content or make video games available for download, and other enterprises that run interactive or high-traffic websites, such as e-commerce firms and financial institutions. Akamai also has a significant security business, which is integrated with its core delivery and computing businesses to protect customers from cyberthreats.