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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

AMZN' s 10-Year Beneish M-Score Range
Min: -3.71   Max: -1.2
Current: -2.99

-3.71
-1.2

During the past 13 years, the highest Beneish M-Score of Amazon.com Inc was -1.20. 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 * 0.985+0.528 * 0.9235+0.404 * 0.9981+0.892 * 1.1952+0.115 * 1.0477
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0843+4.679 * -0.1278-0.327 * 1.0617
=-2.99

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $5,612 Mil.
Revenue was 29329 + 20579 + 19340 + 19741 = $88,989 Mil.
Gross Profit was 8657 + 5952 + 5941 + 5686 = $26,236 Mil.
Total Current Assets was $31,327 Mil.
Total Assets was $54,505 Mil.
Property, Plant and Equipment(Net PPE) was $16,967 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,746 Mil.
Selling, General & Admin. Expense(SGA) was $16,650 Mil.
Total Current Liabilities was $28,089 Mil.
Long-Term Debt was $12,489 Mil.
Net Income was 214 + -437 + -126 + 108 = $-241 Mil.
Non Operating Income was -95 + -50 + 22 + 5 = $-118 Mil.
Cash Flow from Operations was 6715 + 1766 + 862 + -2502 = $6,841 Mil.
Accounts Receivable was $4,767 Mil.
Revenue was 25587 + 17092 + 15704 + 16070 = $74,453 Mil.
Gross Profit was 6781 + 4726 + 4495 + 4269 = $20,271 Mil.
Total Current Assets was $24,625 Mil.
Total Assets was $40,159 Mil.
Property, Plant and Equipment(Net PPE) was $10,949 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,252 Mil.
Selling, General & Admin. Expense(SGA) was $12,847 Mil.
Total Current Liabilities was $22,980 Mil.
Long-Term Debt was $5,181 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)
=(5612 / 88989) / (4767 / 74453)
=0.06306397 / 0.06402697
=0.985

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)
=(5952 / 74453) / (8657 / 88989)
=0.27226572 / 0.29482296
=0.9235

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 - (31327 + 16967) / 54505) / (1 - (24625 + 10949) / 40159)
=0.11395285 / 0.11417117
=0.9981

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
=88989 / 74453
=1.1952

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))
=(3252 / (3252 + 10949)) / (4746 / (4746 + 16967))
=0.22899796 / 0.21857873
=1.0477

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)
=(16650 / 88989) / (12847 / 74453)
=0.18710178 / 0.17255181
=1.0843

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)
=((12489 + 28089) / 54505) / ((5181 + 22980) / 40159)
=0.74448216 / 0.70123758
=1.0617

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
=(-241 - -118 - 6841) / 54505
=-0.1278

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 -2.99 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.12191.15431.27570.9080.93421.1511.15261.16831.02480.985
GMI 0.96381.04741.01451.01450.98721.00990.99570.90660.90910.9235
AQI 0.79551.07760.9821.30641.25920.71060.9510.96720.88520.9981
SGI 1.22671.26161.3851.29191.27881.39561.40561.27071.21871.1952
DEPI 0.91440.83310.99321.23951.10991.18970.96730.84081.02241.0479
SGAI 1.01920.99710.96841.42810.69321.02961.11061.11471.08421.0843
LVGI 0.85570.9510.89570.81410.86841.06261.10131.08690.99991.0617
TATA -0.1131-0.119-0.142-0.1322-0.1752-0.1289-0.1324-0.1271-0.1261-0.1278
M-score -2.76-2.61-2.51-2.78-2.91-2.71-2.68-2.81-2.96-2.99

Amazon.com Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.21741.16831.1151.14251.04331.02481.28411.17881.17690.985
GMI 0.94880.90650.89680.89590.8940.90910.9140.9190.92910.9235
AQI 1.07360.96720.89090.78130.80190.88520.84790.86841.06790.9981
SGI 1.31341.27071.24461.23051.22491.21871.22111.22311.21551.1952
DEPI 0.73970.84110.93721.01451.0821.02231.0591.07211.05551.0477
SGAI 1.11171.11461.11281.09931.09461.08421.07551.07521.08761.0843
LVGI 0.93181.08691.18721.15061.09040.99990.9660.96160.9841.0617
TATA -0.1452-0.1271-0.1507-0.1515-0.1472-0.1261-0.1373-0.1359-0.1452-0.1278
M-score -2.70-2.81-3.05-3.06-3.10-2.96-2.77-2.84-2.82-2.99
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