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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-3.13 (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.

Amazon.com Inc has a M-score of -3.13 suggests that the company is not a manipulator.

AMZN' s 10-Year Beneish M-Score Range
Min: -4.36   Max: -0.01
Current: -3.13

-4.36
-0.01

During the past 13 years, the highest Beneish M-Score of Amazon.com Inc was -0.01. The lowest was -4.36. And the median was -2.70.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Amazon.com 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 * 1.0276+0.528 * 0.916+0.404 * 0.9769+0.892 * 1.1772+0.115 * 0.9982
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0657+4.679 * -0.1597-0.327 * 1.0615
=-3.13

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $4,772 Mil.
Revenue was 22717 + 29329 + 20579 + 19340 = $91,965 Mil.
Gross Profit was 7322 + 8657 + 5952 + 5941 = $27,872 Mil.
Total Current Assets was $25,922 Mil.
Total Assets was $50,075 Mil.
Property, Plant and Equipment(Net PPE) was $17,736 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,162 Mil.
Selling, General & Admin. Expense(SGA) was $15,943 Mil.
Total Current Liabilities was $23,177 Mil.
Long-Term Debt was $8,257 Mil.
Net Income was -57 + 214 + -437 + -126 = $-406 Mil.
Non Operating Income was -130 + -95 + -50 + 22 = $-253 Mil.
Cash Flow from Operations was -1499 + 6715 + 1766 + 862 = $7,844 Mil.
Accounts Receivable was $3,945 Mil.
Revenue was 19741 + 25587 + 17092 + 15704 = $78,124 Mil.
Gross Profit was 5686 + 6781 + 4726 + 4495 = $21,688 Mil.
Total Current Assets was $19,327 Mil.
Total Assets was $36,364 Mil.
Property, Plant and Equipment(Net PPE) was $12,267 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,562 Mil.
Selling, General & Admin. Expense(SGA) was $12,709 Mil.
Total Current Liabilities was $18,357 Mil.
Long-Term Debt was $3,147 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(4772 / 91965) / (3945 / 78124)
=0.05188931 / 0.05049665
=1.0276

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)
=(8657 / 78124) / (7322 / 91965)
=0.27760995 / 0.30307182
=0.916

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (25922 + 17736) / 50075) / (1 - (19327 + 12267) / 36364)
=0.12814778 / 0.13117369
=0.9769

4. SGI = Sales Growth Index

Ratio of sales 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
=91965 / 78124
=1.1772

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(3562 / (3562 + 12267)) / (5162 / (5162 + 17736))
=0.22503001 / 0.22543454
=0.9982

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(15943 / 91965) / (12709 / 78124)
=0.17335943 / 0.16267728
=1.0657

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)
=((8257 + 23177) / 50075) / ((3147 + 18357) / 36364)
=0.62773839 / 0.59135409
=1.0615

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
=(-406 - -253 - 7844) / 50075
=-0.1597

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.

Amazon.com Inc has a M-score of -3.13 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Amazon.com Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.12191.15431.27570.9080.93421.1511.15261.16831.02480.985
GMI 0.96381.04741.01451.01450.98721.00990.99570.90660.90910.9235
AQI 0.79551.07760.9821.30641.25920.71060.9510.96720.88520.9981
SGI 1.22671.26161.3851.29191.27881.39561.40561.27071.21871.1952
DEPI 0.91440.83310.99321.23951.10991.18970.96730.84081.02241.0479
SGAI 1.01920.99710.96841.42810.69321.02961.11061.11471.08421.0843
LVGI 0.85570.9510.89570.81410.86841.06261.10131.08690.99991.0617
TATA -0.1131-0.119-0.142-0.1322-0.1752-0.1289-0.1324-0.1271-0.1261-0.1278
M-score -2.76-2.61-2.51-2.78-2.91-2.71-2.68-2.81-2.96-2.99

Amazon.com Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.16831.1151.14251.04331.02481.28411.17881.17690.9851.0276
GMI 0.90650.89680.89590.8940.90910.9140.9190.92910.92350.916
AQI 0.96720.89090.78130.80190.88520.84790.86841.06790.99810.9769
SGI 1.27071.24461.23051.22491.21871.22111.22311.21551.19521.1772
DEPI 0.84110.93721.01451.0821.02231.0591.07211.05551.04770.9982
SGAI 0.88221.0441.03550.9561.20071.06441.0651.07681.07171.0657
LVGI 1.08691.18721.15061.09040.99990.9660.96160.9841.06171.0615
TATA -0.1271-0.1507-0.1515-0.1472-0.1261-0.1373-0.1359-0.1452-0.1278-0.1597
M-score -2.77-3.04-3.05-3.08-2.98-2.76-2.84-2.82-2.99-3.13
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