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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

AMZN' s 10-Year Beneish M-Score Range
Min: -4.41   Max: 0.16
Current: -2.84

-4.41
0.16

During the past 13 years, the highest Beneish M-Score of Amazon.com Inc was 0.16. The lowest was -4.41. 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 * 1.1788+0.528 * 0.919+0.404 * 0.8684+0.892 * 1.2231+0.115 * 1.0721
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0752+4.679 * -0.1359-0.327 * 0.9616
=-2.84

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $4,125 Mil.
Revenue was 19340 + 19741 + 25587 + 17092 = $81,760 Mil.
Gross Profit was 5941 + 5686 + 6781 + 4726 = $23,134 Mil.
Total Current Assets was $18,755 Mil.
Total Assets was $37,898 Mil.
Property, Plant and Equipment(Net PPE) was $14,089 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,915 Mil.
Selling, General & Admin. Expense(SGA) was $14,591 Mil.
Total Current Liabilities was $18,751 Mil.
Long-Term Debt was $3,119 Mil.
Net Income was -126 + 108 + 240 + -41 = $181 Mil.
Non Operating Income was 22 + 5 + -29 + 9 = $7 Mil.
Cash Flow from Operations was 862 + -2502 + 5578 + 1388 = $5,326 Mil.
Accounts Receivable was $2,861 Mil.
Revenue was 15704 + 16070 + 21268 + 13806 = $66,848 Mil.
Gross Profit was 4495 + 4269 + 5131 + 3487 = $17,382 Mil.
Total Current Assets was $16,285 Mil.
Total Assets was $29,623 Mil.
Property, Plant and Equipment(Net PPE) was $8,789 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,672 Mil.
Selling, General & Admin. Expense(SGA) was $11,095 Mil.
Total Current Liabilities was $14,735 Mil.
Long-Term Debt was $3,042 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)
=(4125 / 81760) / (2861 / 66848)
=0.05045254 / 0.04279859
=1.1788

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)
=(5686 / 66848) / (5941 / 81760)
=0.26002274 / 0.2829501
=0.919

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 - (18755 + 14089) / 37898) / (1 - (16285 + 8789) / 29623)
=0.13335796 / 0.15356311
=0.8684

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
=81760 / 66848
=1.2231

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))
=(2672 / (2672 + 8789)) / (3915 / (3915 + 14089))
=0.23313847 / 0.21745168
=1.0721

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)
=(14591 / 81760) / (11095 / 66848)
=0.17846135 / 0.16597355
=1.0752

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)
=((3119 + 18751) / 37898) / ((3042 + 14735) / 29623)
=0.57707531 / 0.60010802
=0.9616

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
=(181 - 7 - 5326) / 37898
=-0.1359

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 -2.84 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.14651.12191.15431.27570.9080.93421.1511.15261.02971.1628
GMI 1.03190.96381.04741.01451.01450.98721.00990.99570.90660.9091
AQI 2.63490.79551.07760.9821.30641.25920.71060.9510.96720.8852
SGI 1.31491.22671.26161.3851.29191.27881.39561.40561.27071.2187
DEPI 1.10010.91190.83310.99321.23951.10991.18970.96730.84081.0224
SGAI 0.90021.02620.95650.96841.00071.39010.73271.11061.11471.0842
LVGI 0.72330.87240.93280.89570.81410.86841.06261.10131.08690.9999
TATA 0.006-0.1131-0.119-0.142-0.1322-0.1752-0.1289-0.1324-0.1271-0.1261
M-score -1.24-2.77-2.59-2.51-2.70-3.03-2.66-2.68-2.93-2.83

Amazon.com Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.99881.04921.21741.02971.1151.14251.04331.16281.28411.1788
GMI 0.98320.96360.94880.90650.89680.89590.8940.90910.9140.919
AQI 1.0891.10481.07360.96720.89090.78130.80190.88520.84790.8684
SGI 1.3921.34881.31341.27071.24461.23051.22491.21871.22111.2231
DEPI 0.82040.76370.73970.84110.93721.01451.0821.02231.0591.0721
SGAI 1.20081.31171.3921.11461.11281.09931.09461.08421.07551.0752
LVGI 1.12621.16310.93181.08691.18721.15061.09040.99990.9660.9616
TATA -0.1222-0.1364-0.1452-0.1271-0.1507-0.1515-0.1472-0.1261-0.1373-0.1359
M-score -2.77-2.87-2.75-2.93-3.05-3.06-3.10-2.83-2.77-2.84
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