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eBay Inc (NAS:EBAY)
Beneish M-Score
-3.29 (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.

eBay Inc has a M-score of -3.29 suggests that the company is not a manipulator.

EBAY' s 10-Year Beneish M-Score Range
Min: -3.3   Max: -1.79
Current: -3.29

-3.3
-1.79

During the past 13 years, the highest Beneish M-Score of eBay Inc was -1.79. The lowest was -3.30. And the median was -2.65.


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 eBay 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 * 0.7947+0.528 * 1.0094+0.404 * 0.9344+0.892 * 1.1156+0.115 * 0.992
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0219+4.679 * -0.1249-0.327 * 1.3336
=-3.29

* 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 $797 Mil.
Revenue was 4921 + 4353 + 4366 + 4262 = $17,902 Mil.
Gross Profit was 3321 + 2964 + 2974 + 2911 = $12,170 Mil.
Total Current Assets was $26,531 Mil.
Total Assets was $45,132 Mil.
Property, Plant and Equipment(Net PPE) was $2,902 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,490 Mil.
Selling, General & Admin. Expense(SGA) was $5,430 Mil.
Total Current Liabilities was $17,531 Mil.
Long-Term Debt was $6,777 Mil.
Net Income was 1023 + 673 + 676 + -2326 = $46 Mil.
Non Operating Income was 7 + 0 + 0 + 0 = $7 Mil.
Cash Flow from Operations was 1641 + 1368 + 1494 + 1174 = $5,677 Mil.
Accounts Receivable was $899 Mil.
Revenue was 4530 + 3892 + 3877 + 3748 = $16,047 Mil.
Gross Profit was 3081 + 2668 + 2666 + 2596 = $11,011 Mil.
Total Current Assets was $23,283 Mil.
Total Assets was $41,488 Mil.
Property, Plant and Equipment(Net PPE) was $2,760 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,400 Mil.
Selling, General & Admin. Expense(SGA) was $4,763 Mil.
Total Current Liabilities was $12,639 Mil.
Long-Term Debt was $4,117 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)
=(797 / 17902) / (899 / 16047)
=0.04452017 / 0.05602293
=0.7947

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)
=(2964 / 16047) / (3321 / 17902)
=0.68617187 / 0.67981231
=1.0094

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 - (26531 + 2902) / 45132) / (1 - (23283 + 2760) / 41488)
=0.34784632 / 0.37227632
=0.9344

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
=17902 / 16047
=1.1156

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))
=(1400 / (1400 + 2760)) / (1490 / (1490 + 2902))
=0.33653846 / 0.33925319
=0.992

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)
=(5430 / 17902) / (4763 / 16047)
=0.30331807 / 0.2968156
=1.0219

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)
=((6777 + 17531) / 45132) / ((4117 + 12639) / 41488)
=0.53859789 / 0.40387582
=1.3336

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
=(46 - 7 - 5677) / 45132
=-0.1249

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.

eBay Inc has a M-score of -3.29 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.

eBay Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.72470.51870.9510.81350.91641.06281.17950.9980.95910.7947
GMI 0.99011.0391.0251.0421.03250.99431.02421.00371.02071.0094
AQI 1.21050.84240.83121.12160.90210.91231.08410.76671.04680.9344
SGI 1.39161.31131.28521.11331.02181.04911.27261.20771.14031.1156
DEPI 0.83530.90811.01030.93120.98331.14441.03790.98810.96610.992
SGAI 1.02161.07950.92280.83971.12260.87930.97940.97650.93231.0219
LVGI 0.92771.48171.08081.1780.83261.38071.10671.3410.99621.3336
TATA -0.0878-0.0924-0.0587-0.0707-0.0282-0.0412-0.0548-0.0365-0.0536-0.1249
M-score -1.79-3.30-2.61-2.85-2.66-2.70-2.31-2.67-2.60-3.29

eBay Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.9980.99940.99390.96530.95910.95730.90710.86620.79470.7946
GMI 1.00421.00261.00781.01591.02071.02131.01591.01251.00941.0092
AQI 0.76670.74690.71380.88331.04681.10991.2371.04220.93440.8972
SGI 1.20771.17441.15371.15241.14031.13881.1351.1291.11561.0922
DEPI 0.98811.00381.01670.99130.96610.92990.91810.95230.9921.0458
SGAI 0.97540.95930.96870.95420.93230.9540.97531.00161.02191.044
LVGI 1.3411.38421.39181.13270.99621.17651.26951.32961.33361.1109
TATA -0.0365-0.0435-0.0475-0.0479-0.0536-0.1347-0.1419-0.134-0.1249-0.0594
M-score -2.67-2.75-2.80-2.68-2.60-3.03-3.10-3.20-3.29-2.94
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