adidas AG (adidas AG) Beneish M-Score : -3.34 (As of Apr. 27, 2024)

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What is adidas AG 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 -3.34 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ADDDF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.34 Med: -2.66 Max: -2.19
Current: -3.34

During the past 13 years, the highest Beneish M-Score of adidas AG was -2.19. The lowest was -3.34. And the median was -2.66.

adidas AG Beneish M-Score Historical Data

The historical data trend for adidas AG'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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adidas AG Beneish M-Score Chart

adidas AG Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.65

-2.96

-2.67

-2.19

-3.34

adidas AG 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															-2.19	-2.26	-2.68	-3.05	-3.34

Competitive Comparison of adidas AG's Beneish M-Score

For the Footwear & Accessories subindustry, adidas AG'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.

adidas AG's Beneish M-Score Distribution in the Manufacturing - Apparel & Accessories Industry

For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, adidas AG's Beneish M-Score distribution charts can be found below:

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

adidas AG 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 adidas AG 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 * 0.7936

0.528 * 0.9949

0.404 * 1.1838

0.892 * 0.9776

0.115 * 1.0116

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0416

4.679 * -0.149284

0.327 * 0.9688

-3.31

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $2,079 Mil.
Revenue was 5246.456 + 6402.348 + 5788.732 + 5646.681 = $23,084 Mil.
Gross Profit was 2340.24 + 3153.682 + 2944.745 + 2529.979 = $10,969 Mil.
Total Current Assets was $10,697 Mil.
Total Assets was $19,651 Mil.
Property, Plant and Equipment(Net PPE) was $4,804 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,306 Mil.
Selling, General, & Admin. Expense(SGA) was $10,780 Mil.
Total Current Liabilities was $8,771 Mil.
Long-Term Debt & Capital Lease Obligation was $4,874 Mil.
Net Income was -413.304 + 276.414 + 91.008 + -41.756 = $-88 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1154.853 + 1185.699 + 1094.258 + -588.865 = $2,846 Mil.

Total Receivables was $2,679 Mil.
Revenue was 5513.771 + 6344.554 + 5915.433 + 5839.207 = $23,613 Mil.
Gross Profit was 2155.72 + 3114.851 + 2975.687 + 2916.3 = $11,163 Mil.
Total Current Assets was $12,428 Mil.
Total Assets was $21,500 Mil.
Property, Plant and Equipment(Net PPE) was $5,236 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,445 Mil.
Selling, General, & Admin. Expense(SGA) was $10,587 Mil.
Total Current Liabilities was $9,806 Mil.
Long-Term Debt & Capital Lease Obligation was $5,603 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)
	=	(2078.517 / 23084.217)	/	(2679.025 / 23612.965)
	=	0.090041	/	0.113456
	=	0.7936

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)
	=	(11162.558 / 23612.965)	/	(10968.646 / 23084.217)
	=	0.47273	/	0.475158
	=	0.9949

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 - (10696.838 + 4803.708) / 19651.036)	/	(1 - (12427.966 + 5236.229) / 21500)
	=	0.21121	/	0.17841
	=	1.1838

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
	=	23084.217	/	23612.965
	=	0.9776

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))
	=	(1445.176 / (1445.176 + 5236.229))	/	(1306.493 / (1306.493 + 4803.708))
	=	0.216298	/	0.213822
	=	1.0116

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)
	=	(10780.048 / 23084.217)	/	(10586.714 / 23612.965)
	=	0.466988	/	0.448343
	=	1.0416

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)
	=	((4873.501 + 8770.992) / 19651.036)	/	((5602.754 + 9806.144) / 21500)
	=	0.69434	/	0.716693
	=	0.9688

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
	=	(-87.638 - 0	-	2845.945)	/	19651.036
	=	-0.149284

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.

adidas AG has a M-score of -3.31 suggests that the company is unlikely to be a manipulator.

adidas AG Beneish M-Score Related Terms

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adidas AG (adidas AG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » adidas AG (OTCPK:ADDDF) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

ADDYY:USA ADS:Romania ADS:Poland ADS:Mexico ADS:Italy ADIDAS:Hungary ADSd:UK 0OLD:UK ADS:Germany ADS:Austria

Address

Adi-Dassler-Strasse 1, Herzogenaurach, BY, DEU, 91074

Website

https://www.adidas-group.com

Adidas designs, develops, produces, and markets athletic and leisure apparel, footwear, accessories, and sports equipment. Under its eponymous brand, it produces apparel for competitive athletics, casual activewear, and casual fashion. Adidas sells its products in more than 160 countries through nearly 2,000 owned retail stores, 15,000 mono-branded franchise stores, 150,000 wholesale doors, and owned e-commerce that is available in 65 countries. The company was founded in 1949 in Germany.