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Amazon.com Inc (NAS:AMZN)
Beneish M-Score
-3.21 (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 -3.21 suggests that the company is not a manipulator.

AMZN' s 10-Year Beneish M-Score Range
Min: -4.36   Max: -0.01
Current: -3.21

-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 -2.71.


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 * 1.0178+0.528 * 0.905+0.404 * 0.9395+0.892 * 1.1718+0.115 * 0.9797
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0642+4.679 * -0.1696-0.327 * 1.0628
=-3.21

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 92 + -57 + 214 + -437 = $-188 Mil.
Non Operating Income was 0 + -130 + -95 + -50 = $-275 Mil.
Cash Flow from Operations was 1997 + -1499 + 6715 + 1766 = $8,979 Mil.
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.



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)
=(4920 / 95810) / (4125 / 81760)
=0.05135163 / 0.05045254
=1.0178

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)
=(7322 / 81760) / (8025 / 95810)
=0.2829501 / 0.31266047
=0.905

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 - (26391 + 19479) / 52440) / (1 - (18755 + 14089) / 37898)
=0.12528604 / 0.13335796
=0.9395

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
=95810 / 81760
=1.1718

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))
=(3915 / (3915 + 14089)) / (5557 / (5557 + 19479))
=0.21745168 / 0.22196038
=0.9797

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)
=(18196 / 95810) / (14591 / 81760)
=0.18991755 / 0.17846135
=1.0642

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)
=((8250 + 23912) / 52440) / ((3119 + 18751) / 37898)
=0.61331045 / 0.57707531
=1.0628

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
=(-188 - -275 - 8979) / 52440
=-0.1696

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 -3.21 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.1151.14251.04331.02481.28411.17881.17690.9851.02761.0178
GMI 0.89680.89590.8940.90910.9140.9190.92910.92350.9160.905
AQI 0.89090.78130.80190.88520.84790.86841.06790.99810.97690.9395
SGI 1.24461.23051.22491.21871.22111.22311.21551.19521.17721.1718
DEPI 0.93721.01451.0821.02231.0591.07211.05551.04770.99820.9797
SGAI 0.94250.94130.77351.2971.26981.25581.38781.08431.08031.0642
LVGI 1.18721.15061.09040.99990.9660.96160.9841.06171.06151.0628
TATA -0.1507-0.1515-0.1472-0.1261-0.1373-0.1359-0.1452-0.1278-0.1597-0.1696
M-score -3.02-3.03-3.05-2.99-2.80-2.87-2.87-2.99-3.13-3.21
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