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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-3.09 (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 -3.09 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: -3.09

-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 * 0.9834+0.528 * 0.909+0.404 * 0.9403+0.892 * 1.2591+0.115 * 1.0109
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0158+4.679 * -0.165-0.327 * 0.9471
=-3.09

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $6,092 Mil.
Revenue was 30404 + 29128 + 35747 + 25358 = $120,637 Mil.
Gross Profit was 11224 + 10262 + 11406 + 8603 = $41,495 Mil.
Total Current Assets was $32,220 Mil.
Total Assets was $65,076 Mil.
Property, Plant and Equipment(Net PPE) was $25,190 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,087 Mil.
Selling, General & Admin. Expense(SGA) was $23,274 Mil.
Total Current Liabilities was $29,587 Mil.
Long-Term Debt was $8,212 Mil.
Net Income was 857 + 513 + 482 + 79 = $1,931 Mil.
Non Operating Income was -14 + 81 + -69 + -56 = $-58 Mil.
Cash Flow from Operations was 3465 + -2160 + 8812 + 2610 = $12,727 Mil.
Accounts Receivable was $4,920 Mil.
Revenue was 23185 + 22717 + 29329 + 20579 = $95,810 Mil.
Gross Profit was 8025 + 7322 + 8657 + 5952 = $29,956 Mil.
Total Current Assets was $26,391 Mil.
Total Assets was $52,440 Mil.
Property, Plant and Equipment(Net PPE) was $19,479 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,557 Mil.
Selling, General & Admin. Expense(SGA) was $18,196 Mil.
Total Current Liabilities was $23,912 Mil.
Long-Term Debt was $8,250 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)
=(6092 / 120637) / (4920 / 95810)
=0.0504986 / 0.05135163
=0.9834

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)
=(29956 / 95810) / (41495 / 120637)
=0.31266047 / 0.34396578
=0.909

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 - (32220 + 25190) / 65076) / (1 - (26391 + 19479) / 52440)
=0.11780073 / 0.12528604
=0.9403

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
=120637 / 95810
=1.2591

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))
=(5557 / (5557 + 19479)) / (7087 / (7087 + 25190))
=0.22196038 / 0.21956811
=1.0109

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)
=(23274 / 120637) / (18196 / 95810)
=0.19292589 / 0.18991755
=1.0158

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)
=((8212 + 29587) / 65076) / ((8250 + 23912) / 52440)
=0.58084394 / 0.61331045
=0.9471

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
=(1931 - -58 - 12727) / 65076
=-0.165

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 -3.09 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 0.99710.96841.00070.98921.02961.11061.11471.08421.08431.0195
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 -2.61-2.51-2.70-2.96-2.71-2.68-2.81-2.96-2.99-3.21

Amazon.com Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.28411.17881.17690.9851.02761.01781.05430.95180.86180.9834
GMI 0.9140.9190.92910.92350.9160.9050.88150.89230.89760.909
AQI 0.84790.86841.06790.99810.97690.93950.7890.95630.93280.9403
SGI 1.22111.22311.21551.19521.17721.17181.181.20251.23331.2591
DEPI 1.0591.07211.05551.04770.99820.97970.97070.97851.01181.0109
SGAI 1.26981.25581.38781.08431.08031.06421.03641.01951.01391.0158
LVGI 0.9660.96160.9841.06171.06151.06281.04790.98690.94880.9471
TATA -0.1373-0.1359-0.1452-0.1278-0.1597-0.1696-0.1639-0.1691-0.1644-0.165
M-score -2.80-2.87-2.87-2.99-3.13-3.21-3.21-3.21-3.23-3.09
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