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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-3.23 (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 -3.23 suggests that the company is not a manipulator.

AMZN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.36   Max: 6.36
Current: -3.23

-4.36
6.36

During the past 13 years, the highest Beneish M-Score of Amazon.com Inc was 6.36. The lowest was -4.36. And the median was -2.71.


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 * 0.8618+0.528 * 0.8976+0.404 * 0.9328+0.892 * 1.2333+0.115 * 1.0118
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0139+4.679 * -0.1644-0.327 * 0.9488
=-3.23

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $5,072 Mil.
Revenue was 29128 + 35747 + 25358 + 23185 = $113,418 Mil.
Gross Profit was 10262 + 11406 + 8603 + 8025 = $38,296 Mil.
Total Current Assets was $30,513 Mil.
Total Assets was $61,128 Mil.
Property, Plant and Equipment(Net PPE) was $23,308 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,682 Mil.
Selling, General & Admin. Expense(SGA) was $21,763 Mil.
Total Current Liabilities was $28,187 Mil.
Long-Term Debt was $8,219 Mil.
Net Income was 513 + 482 + 79 + 92 = $1,166 Mil.
Non Operating Income was 81 + -69 + -56 + 0 = $-44 Mil.
Cash Flow from Operations was -2160 + 8812 + 2610 + 1997 = $11,259 Mil.
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 $17,405 Mil.
Total Current Liabilities was $23,177 Mil.
Long-Term Debt was $8,257 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)
=(5072 / 113418) / (4772 / 91965)
=0.04471953 / 0.05188931
=0.8618

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)
=(27872 / 91965) / (38296 / 113418)
=0.30307182 / 0.33765364
=0.8976

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 - (30513 + 23308) / 61128) / (1 - (25922 + 17736) / 50075)
=0.11953606 / 0.12814778
=0.9328

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
=113418 / 91965
=1.2333

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))
=(5162 / (5162 + 17736)) / (6682 / (6682 + 23308))
=0.22543454 / 0.2228076
=1.0118

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)
=(21763 / 113418) / (17405 / 91965)
=0.19188312 / 0.18925678
=1.0139

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)
=((8219 + 28187) / 61128) / ((8257 + 23177) / 50075)
=0.59556995 / 0.62773839
=0.9488

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
=(1166 - -44 - 11259) / 61128
=-0.1644

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 -3.23 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.15431.27570.9080.93421.1511.15261.16831.02480.9850.9518
GMI 1.04741.01451.01450.98721.00990.99570.90660.90910.92350.8923
AQI 1.07760.9821.30641.25920.71060.9510.96720.88520.99810.9563
SGI 1.26161.3851.29191.27881.39561.40561.27071.21871.19521.2025
DEPI 0.83310.99321.23951.10991.18970.96730.84081.02241.04790.9785
SGAI 0.95650.96841.00071.39010.73271.11061.11471.08421.08431.0195
LVGI 0.9510.89570.81410.86841.06261.10131.08690.99991.06170.9869
TATA -0.119-0.142-0.1322-0.1752-0.1289-0.1324-0.1271-0.1261-0.1278-0.1691
M-score -2.60-2.51-2.70-3.03-2.66-2.68-2.81-2.96-2.99-3.21

Amazon.com Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.02481.28411.17881.17690.9851.02761.01781.05430.95180.8618
GMI 0.90910.9140.9190.92910.92350.9160.9050.88150.89230.8976
AQI 0.88520.84790.86841.06790.99810.97690.93950.7890.95630.9328
SGI 1.21871.22111.22311.21551.19521.17721.17181.181.20251.2333
DEPI 1.02231.0591.07211.05551.04770.99820.97970.97070.97851.0118
SGAI 1.2971.26981.25581.38781.08431.08031.06421.03641.01951.0139
LVGI 0.99990.9660.96160.9841.06171.06151.06281.04790.98690.9488
TATA -0.1261-0.1373-0.1359-0.1452-0.1278-0.1597-0.1696-0.1639-0.1691-0.1644
M-score -2.99-2.80-2.87-2.87-2.99-3.13-3.21-3.21-3.21-3.23
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