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American Express Co (NYSE:AXP)
Beneish M-Score
-2.59 (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.

American Express Co has a M-score of -2.59 suggests that the company is not a manipulator.

AXP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.1   Max: -0.49
Current: -2.59

-3.1
-0.49

During the past 13 years, the highest Beneish M-Score of American Express Co was -0.49. The lowest was -3.10. And the median was -2.57.


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 American Express Co 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 * 1.0563+0.528 * 1+0.404 * 0.9994+0.892 * 0.9681+0.115 * 1.0088
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9851+4.679 * -0.0394-0.327 * 0.8422
=-2.59

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $46,660 Mil.
Revenue was 8088 + 8391 + 8193 + 8284 = $32,956 Mil.
Gross Profit was 8088 + 8391 + 8193 + 8284 = $32,956 Mil.
Total Current Assets was $0 Mil.
Total Assets was $158,816 Mil.
Property, Plant and Equipment(Net PPE) was $4,137 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,053 Mil.
Selling, General & Admin. Expense(SGA) was $16,417 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $47,311 Mil.
Net Income was 1426 + 899 + 1266 + 1473 = $5,064 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2469 + 2898 + 3773 + 2175 = $11,315 Mil.
Accounts Receivable was $45,628 Mil.
Revenue was 7950 + 9107 + 8329 + 8657 = $34,043 Mil.
Gross Profit was 7950 + 9107 + 8329 + 8657 = $34,043 Mil.
Total Current Assets was $0 Mil.
Total Assets was $154,684 Mil.
Property, Plant and Equipment(Net PPE) was $3,940 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,014 Mil.
Selling, General & Admin. Expense(SGA) was $17,215 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $54,712 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)
=(46660 / 32956) / (45628 / 34043)
=1.41582716 / 1.34030491
=1.0563

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)
=(8391 / 34043) / (8088 / 32956)
=1 / 1
=1

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 - (0 + 4137) / 158816) / (1 - (0 + 3940) / 154684)
=0.97395099 / 0.97452872
=0.9994

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
=32956 / 34043
=0.9681

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))
=(1014 / (1014 + 3940)) / (1053 / (1053 + 4137))
=0.20468308 / 0.20289017
=1.0088

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)
=(16417 / 32956) / (17215 / 34043)
=0.49814905 / 0.50568399
=0.9851

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)
=((47311 + 0) / 158816) / ((54712 + 0) / 154684)
=0.2978982 / 0.35370174
=0.8422

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
=(5064 - 0 - 11315) / 158816
=-0.0394

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.

American Express Co has a M-score of -2.59 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.

American Express Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98191.01440.85141.20830.9331.01290.98750.98430.95781.0381
GMI 1111111111
AQI 1.00131.00030.99451.0011.00270.99780.99820.99841.00050.9992
SGI 1.10941.07071.02290.86461.13441.0771.05411.04411.040.957
DEPI 0.98711.110.99730.70031.15781.11991.00011.02811.01921.0097
SGAI 0.77661.0690.99210.99291.08481.05730.97130.95141.0030.9799
LVGI 1.23321.10841.28990.88571.07090.86010.99130.93681.00970.8186
TATA -0.0413-0.0299-0.0473-0.0343-0.0356-0.0361-0.017-0.0208-0.0321-0.036
M-score -2.63-2.58-2.91-2.57-2.61-2.52-2.52-2.52-2.63-2.59

American Express Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.98430.9830.98840.98250.95780.94190.97260.98661.03811.0563
GMI 1111111111
AQI 0.99840.99790.9990.99951.00051.00020.99980.99930.99920.9994
SGI 1.04411.04531.0491.03571.041.02260.9990.99410.9570.9681
DEPI 1.02811.00430.98751.02231.01921.01751.05161.01691.00971.0088
SGAI 0.94060.94070.96110.941.02061.0340.98261.00980.97940.9851
LVGI 0.93680.99371.03791.03471.00970.99060.93260.87130.81860.8422
TATA -0.02080.00810.016-0.0207-0.0321-0.0249-0.0285-0.0309-0.036-0.0394
M-score -2.52-2.41-2.38-2.56-2.64-2.63-2.61-2.60-2.59-2.59
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