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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 -2.58.


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 * 1.0266+0.528 * 1+0.404 * 0.9992+0.892 * 0.9789+0.115 * 0.9961
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0302+4.679 * -0.0267-0.327 * 0.9454
=-2.59

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $47,497 Mil.
Revenue was 8235 + 8088 + 8391 + 8193 = $32,907 Mil.
Gross Profit was 8235 + 8088 + 8391 + 8193 = $32,907 Mil.
Total Current Assets was $0 Mil.
Total Assets was $159,642 Mil.
Property, Plant and Equipment(Net PPE) was $4,210 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,065 Mil.
Selling, General & Admin. Expense(SGA) was $16,731 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $50,649 Mil.
Net Income was 2015 + 1426 + 899 + 1266 = $5,606 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 669 + 2469 + 2898 + 3839 = $9,875 Mil.
Accounts Receivable was $47,264 Mil.
Revenue was 8284 + 7950 + 9081 + 8303 = $33,618 Mil.
Gross Profit was 8284 + 7950 + 9081 + 8303 = $33,618 Mil.
Total Current Assets was $0 Mil.
Total Assets was $157,152 Mil.
Property, Plant and Equipment(Net PPE) was $4,016 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,011 Mil.
Selling, General & Admin. Expense(SGA) was $16,591 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $52,740 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)
=(47497 / 32907) / (47264 / 33618)
=1.44337071 / 1.4059135
=1.0266

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)
=(33618 / 33618) / (32907 / 32907)
=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 + 4210) / 159642) / (1 - (0 + 4016) / 157152)
=0.97362849 / 0.97444512
=0.9992

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
=32907 / 33618
=0.9789

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))
=(1011 / (1011 + 4016)) / (1065 / (1065 + 4210))
=0.20111398 / 0.20189573
=0.9961

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)
=(16731 / 32907) / (16591 / 33618)
=0.50843286 / 0.49351538
=1.0302

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)
=((50649 + 0) / 159642) / ((52740 + 0) / 157152)
=0.31726613 / 0.33559866
=0.9454

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
=(5606 - 0 - 9875) / 159642
=-0.0267

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 0.98390.97840.84611.20830.9411.00420.98840.91531.03221.035
GMI 1111111111
AQI 1.00131.00030.99451.00121.00250.99780.99820.99841.00050.9992
SGI 1.10711.11011.02920.86461.12471.08631.05321.04171.04010.9599
DEPI 0.98621.05940.99730.70031.15781.11991.00011.02811.01921.0097
SGAI 0.83061.03430.9860.99291.10141.04140.97060.94911.00320.9828
LVGI 1.23321.10841.28990.87821.080.86010.99130.93681.00970.8186
TATA -0.0421-0.0299-0.0402-0.0336-0.0318-0.0315-0.017-0.0208-0.0321-0.036
M-score -2.64-2.58-2.88-2.56-2.60-2.50-2.52-2.59-2.57-2.59

American Express Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.98690.9930.98781.03220.94040.96960.9821.0351.05391.0266
GMI 1111111111
AQI 0.99790.9990.99951.00051.00020.99980.99930.99920.99940.9992
SGI 1.04121.04421.03021.04011.02421.00210.99870.95990.97030.9789
DEPI 1.00430.98751.02231.01921.01751.05161.01691.00971.00880.9961
SGAI 0.96960.97270.96661.0031.00650.98011.00310.9880.99831.0302
LVGI 0.99371.03791.03471.00970.99060.93260.87130.81860.84220.9454
TATA 0.00810.016-0.0207-0.0321-0.0249-0.0281-0.0309-0.036-0.0394-0.0267
M-score -2.41-2.38-2.56-2.57-2.63-2.61-2.60-2.59-2.59-2.59
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