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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

AMZN' s 10-Year Beneish M-Score Range
Min: -4.36   Max: -0.01
Current: -2.82

-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 * 1.1769+0.528 * 0.9291+0.404 * 1.0679+0.892 * 1.2155+0.115 * 1.0555
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0876+4.679 * -0.1452-0.327 * 0.984
=-2.82

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $4,373 Mil.
Revenue was 20579 + 19340 + 19741 + 25587 = $85,247 Mil.
Gross Profit was 5952 + 5941 + 5686 + 6781 = $24,360 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 $15,627 Mil.
Total Current Liabilities was $20,842 Mil.
Long-Term Debt was $3,099 Mil.
Net Income was -437 + -126 + 108 + 240 = $-215 Mil.
Non Operating Income was -50 + 22 + 5 + -29 = $-52 Mil.
Cash Flow from Operations was 1766 + 862 + -2502 + 5578 = $5,704 Mil.
Accounts Receivable was $3,057 Mil.
Revenue was 17092 + 15704 + 16070 + 21268 = $70,134 Mil.
Gross Profit was 4726 + 4495 + 4269 + 5131 = $18,621 Mil.
Total Current Assets was $17,334 Mil.
Total Assets was $31,861 Mil.
Property, Plant and Equipment(Net PPE) was $9,991 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,952 Mil.
Selling, General & Admin. Expense(SGA) was $11,821 Mil.
Total Current Liabilities was $16,135 Mil.
Long-Term Debt was $3,043 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)
=(4373 / 85247) / (3057 / 70134)
=0.05129799 / 0.04358799
=1.1769

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)
=(5941 / 70134) / (5952 / 85247)
=0.26550603 / 0.28575786
=0.9291

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 - (18572 + 15702) / 40419) / (1 - (17334 + 9991) / 31861)
=0.15203246 / 0.14236841
=1.0679

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
=85247 / 70134
=1.2155

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))
=(2952 / (2952 + 9991)) / (4328 / (4328 + 15702))
=0.22807695 / 0.21607589
=1.0555

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)
=(15627 / 85247) / (11821 / 70134)
=0.18331437 / 0.16854878
=1.0876

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)
=((3099 + 20842) / 40419) / ((3043 + 16135) / 31861)
=0.59232044 / 0.60192712
=0.984

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
=(-215 - -52 - 5704) / 40419
=-0.1452

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 -2.82 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 1.15171.12191.15431.27570.9080.93421.1511.15261.16831.0248
GMI 1.03180.96381.04741.01451.01450.98721.00990.99570.90660.9091
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 1.06820.91440.83310.99321.23951.10991.18970.96730.84081.0224
SGAI 0.86951.01920.99710.96841.42810.69321.02961.11061.11471.0842
LVGI 0.72330.85570.9510.89570.81410.86841.06261.10131.08690.9999
TATA 0.0086-0.1131-0.119-0.142-0.1322-0.1752-0.1289-0.1324-0.1271-0.1261
M-score -1.22-2.76-2.61-2.51-2.78-2.91-2.71-2.68-2.81-2.96

Amazon.com Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.04921.21741.16831.1151.14251.04331.02481.28411.17881.1769
GMI 0.96360.94880.90650.89680.89590.8940.90910.9140.9190.9291
AQI 1.10481.07360.96720.89090.78130.80190.88520.84790.86841.0679
SGI 1.34881.31341.27071.24461.23051.22491.21871.22111.22311.2155
DEPI 0.76370.73970.84110.93721.01451.0821.02231.0591.07211.0555
SGAI 1.1241.11171.11461.11281.09931.09461.08421.07551.07521.0876
LVGI 1.16310.93181.08691.18721.15061.09040.99990.9660.96160.984
TATA -0.1364-0.1452-0.1271-0.1507-0.1515-0.1472-0.1261-0.1373-0.1359-0.1452
M-score -2.84-2.70-2.81-3.05-3.06-3.10-2.96-2.77-2.84-2.82
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