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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: -3.71   Max: 6.36
Current: -3.23

-3.71
6.36

During the past 13 years, the highest Beneish M-Score of Amazon.com Inc was 6.36. The lowest was -3.71. And the median was -2.76.


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 * 1.0415+0.528 * 0.8767+0.404 * 0.789+0.892 * 1.1944+0.115 * 0.9707
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0202+4.679 * -0.1694-0.327 * 1.0479
=-3.23

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $5,440 Mil.
Revenue was 25358 + 23185 + 22717 + 0 = $71,260 Mil.
Gross Profit was 8603 + 8025 + 7322 + 0 = $23,950 Mil.
Total Current Assets was $28,849 Mil.
Total Assets was $56,230 Mil.
Property, Plant and Equipment(Net PPE) was $20,636 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,909 Mil.
Selling, General & Admin. Expense(SGA) was $13,719 Mil.
Total Current Liabilities was $26,657 Mil.
Long-Term Debt was $8,243 Mil.
Net Income was 79 + 92 + -57 + 0 = $114 Mil.
Non Operating Income was -56 + 0 + -130 + 0 = $-186 Mil.
Cash Flow from Operations was 2610 + 1997 + -1499 + 6715 = $9,823 Mil.
Accounts Receivable was $4,373 Mil.
Revenue was 20579 + 19340 + 19741 + 0 = $59,660 Mil.
Gross Profit was 5952 + 5941 + 5686 + 0 = $17,579 Mil.
Total Current Assets was $18,572 Mil.
Total Assets was $40,419 Mil.
Property, Plant and Equipment(Net PPE) was $15,702 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,328 Mil.
Selling, General & Admin. Expense(SGA) was $11,258 Mil.
Total Current Liabilities was $20,842 Mil.
Long-Term Debt was $3,099 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)
=(5440 / 71260) / (4373 / 59660)
=0.07634016 / 0.07329869
=1.0415

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)
=(8025 / 59660) / (8603 / 71260)
=0.29465303 / 0.33609318
=0.8767

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 - (28849 + 20636) / 56230) / (1 - (18572 + 15702) / 40419)
=0.11995376 / 0.15203246
=0.789

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
=71260 / 59660
=1.1944

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))
=(4328 / (4328 + 15702)) / (5909 / (5909 + 20636))
=0.21607589 / 0.22260313
=0.9707

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)
=(13719 / 71260) / (11258 / 59660)
=0.19252035 / 0.18870265
=1.0202

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)
=((8243 + 26657) / 56230) / ((3099 + 20842) / 40419)
=0.62066513 / 0.59232044
=1.0479

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
=(114 - -186 - 9823) / 56230
=-0.1694

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 0.99710.96841.00070.98921.02961.11061.11471.08421.08431.0195
LVGI 0.9510.89570.81410.86841.06261.10131.08690.99990.95120.9653
TATA -0.119-0.142-0.1322-0.1752-0.1289-0.1324-0.1271-0.1261-0.1278-0.1691
M-score -2.61-2.51-2.70-2.96-2.71-2.68-2.81-2.96-2.95-3.20

Amazon.com Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.04161.01781.27471.16991.17170.96431.01461.00781.04150.6381
GMI 0.90880.90880.91610.92330.93690.93690.92490.90870.87670.8918
AQI 0.80190.88520.84790.86841.06790.99810.97690.93950.7890.9563
SGI 1.2271.2271.23011.23241.22091.22091.19221.18351.19441.7936
DEPI 1.0821.02231.0591.07211.05551.04770.99820.97970.97070.9785
SGAI 0.94110.94110.94210.95181.08771.08771.08141.05841.02021.0108
LVGI 1.09040.99990.9660.96160.9840.95121.06151.06281.04790.9653
TATA -0.1518-0.1328-0.1446-0.143-0.1518-0.1334-0.1659-0.1755-0.1694-0.1692
M-score -3.09-2.96-2.78-2.85-2.84-2.97-3.15-3.24-3.23-2.96
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