Adobe Beneish M Score

ADBE
 Stock
  

USD 445.67  10.78  2.48%   

This module uses fundamental data of Adobe Systems to approximate the value of its Beneish M Score. Adobe Systems M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please continue to Adobe Systems Piotroski F Score and Adobe Systems Altman Z Score analysis.
  
Adobe Systems Issuance Repayment of Debt Securities is projected to based on the last few years of reporting. The past year's Issuance Repayment of Debt Securities was at 2.59 Billion. The current year Long Term Debt to Equity is expected to grow to 0.47, whereas Debt Non Current is forecasted to decline to about 3.5 B.
At this time, it appears that Adobe Systems is an unlikely manipulator. The earnings manipulation may begin if Adobe Systems' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Adobe Systems executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Adobe Systems' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.85
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables0.96Focus
Asset Quality0.88Focus
Expense Coverage1.03Focus
Gross Margin Strengs0.96Focus
Accruals Factor1.03Focus
Depreciation Resistance0.89Focus
Net Sales Growth1.01Focus
Financial Leverage Condition0.92Focus

Adobe Systems Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Adobe Systems' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues9.2 BB
Fairly Up
Increasing
Slightly volatile
Selling General and Administrative Expense3.5 B3.4 B
Sufficiently Up
Increasing
Slightly volatile
Net Cash Flow from Operations3.9 BB
Sufficiently Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion445.8 M346 M
Significantly Up
Increasing
Slightly volatile
Total Assets18.8 B18.8 B
Slightly Up
Increasing
Slightly volatile
Investments1.9 B1.6 B
Fairly Up
Decreasing
Slightly volatile
Investments Current1.8 B1.6 B
Fairly Up
Decreasing
Slightly volatile
Investments Non Current158.7 M186.5 M
Fairly Down
Increasing
Slightly volatile
Property Plant and Equipment Net1.2 B1.1 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables1.3 B1.3 B
Fairly Down
Increasing
Slightly volatile
Total Liabilities8.8 B9.4 B
Notably Down
Increasing
Slightly volatile
Current Assets5.9 B4.9 B
Fairly Up
Decreasing
Very volatile
Assets Non Current13 B13.9 B
Significantly Down
Increasing
Slightly volatile
Current Liabilities4.4 B4.3 B
Fairly Up
Increasing
Slightly volatile
Liabilities Non Current4.4 B5.1 B
Fairly Down
Increasing
Slightly volatile
Total Debt3.7 B4.1 B
Moderately Down
Increasing
Slightly volatile
Debt Current11.5 M11.2 M
Fairly Up
Decreasing
Stable
Debt Non Current3.5 B4.1 B
Fairly Down
Increasing
Slightly volatile
Operating Income2.7 B2.8 B
Sufficiently Down
Increasing
Slightly volatile
Gross Margin0.830.868
Sufficiently Down
Increasing
Very volatile

Adobe Systems Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Adobe Systems' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Adobe Systems in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Adobe Systems' degree of accounting gimmicks and manipulations.

About Adobe Systems Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

445.78 Million

Adobe Systems Depreciation Amortization and Accretion is projected to increase significantly based on the last few years of reporting. The past year's Depreciation Amortization and Accretion was at 346 Million

Adobe Systems ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Adobe Systems' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Adobe Systems' managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Adobe Systems Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Adobe Systems's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Adobe Systems using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Adobe Systems based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Adobe Inc. operates as a diversified software company worldwide. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California. Adobe Systems operates under SoftwareInfrastructure classification in the United States and is traded on NASDAQ Exchange. It employs 25988 people.

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Please continue to Adobe Systems Piotroski F Score and Adobe Systems Altman Z Score analysis. Note that the Adobe Systems information on this page should be used as a complementary analysis to other Adobe Systems' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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Is Adobe Systems' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Adobe Systems. If investors know Adobe will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Adobe Systems listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.073
Market Capitalization
208.6 B
Quarterly Revenue Growth YOY
0.14
Return On Assets
0.15
Return On Equity
0.35
The market value of Adobe Systems is measured differently than its book value, which is the value of Adobe that is recorded on the company's balance sheet. Investors also form their own opinion of Adobe Systems' value that differs from its market value or its book value, called intrinsic value, which is Adobe Systems' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Adobe Systems' market value can be influenced by many factors that don't directly affect Adobe Systems' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Adobe Systems' value and its price as these two are different measures arrived at by different means. Investors typically determine Adobe Systems value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Adobe Systems' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.