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eBay Inc (NAS:EBAY)
Beneish M-Score
-3.20 (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 -3.20 suggests that the company is not a manipulator.

EBAY' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -1.79
Current: -3.2

-3.35
-1.79

During the past 13 years, the highest Beneish M-Score of eBay Inc was -1.79. The lowest was -3.35. 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 * 0.8662+0.528 * 1.0125+0.404 * 1.0422+0.892 * 1.129+0.115 * 0.9523
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0016+4.679 * -0.134-0.327 * 1.3296
=-3.20

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $755 Mil.
Revenue was 4353 + 4366 + 4262 + 4530 = $17,511 Mil.
Gross Profit was 2964 + 2974 + 2911 + 3081 = $11,930 Mil.
Total Current Assets was $25,654 Mil.
Total Assets was $44,476 Mil.
Property, Plant and Equipment(Net PPE) was $2,825 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,487 Mil.
Selling, General & Admin. Expense(SGA) was $5,308 Mil.
Total Current Liabilities was $16,491 Mil.
Long-Term Debt was $7,346 Mil.
Net Income was 673 + 676 + -2326 + 850 = $-127 Mil.
Non Operating Income was 0 + 0 + 0 + 84 = $84 Mil.
Cash Flow from Operations was 1368 + 1494 + 1174 + 1713 = $5,749 Mil.
Accounts Receivable was $772 Mil.
Revenue was 3892 + 3877 + 3748 + 3993 = $15,510 Mil.
Gross Profit was 2668 + 2666 + 2596 + 2769 = $10,699 Mil.
Total Current Assets was $23,476 Mil.
Total Assets was $40,067 Mil.
Property, Plant and Equipment(Net PPE) was $2,763 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,351 Mil.
Selling, General & Admin. Expense(SGA) was $4,694 Mil.
Total Current Liabilities was $12,028 Mil.
Long-Term Debt was $4,123 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)
=(755 / 17511) / (772 / 15510)
=0.04311576 / 0.04977434
=0.8662

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)
=(2974 / 15510) / (2964 / 17511)
=0.68981302 / 0.68128605
=1.0125

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 - (25654 + 2825) / 44476) / (1 - (23476 + 2763) / 40067)
=0.35967713 / 0.34512192
=1.0422

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
=17511 / 15510
=1.129

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))
=(1351 / (1351 + 2763)) / (1487 / (1487 + 2825))
=0.32839086 / 0.34485158
=0.9523

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)
=(5308 / 17511) / (4694 / 15510)
=0.30312375 / 0.30264346
=1.0016

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)
=((7346 + 16491) / 44476) / ((4123 + 12028) / 40067)
=0.53595197 / 0.40309981
=1.3296

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
=(-127 - 84 - 5749) / 44476
=-0.134

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 -3.20 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.70581.72470.51870.9510.81350.91641.06281.17950.9980.9591
GMI 0.99460.99011.0391.0251.0421.03250.99431.02421.00371.0207
AQI 1.03591.21050.84240.83121.12160.90210.91231.08410.76671.0468
SGI 1.51091.39161.31131.28521.11331.02181.04911.27261.20771.1403
DEPI 0.78060.83530.90811.01030.93120.98331.14441.03790.98810.9661
SGAI 0.98191.02161.07950.92280.83971.12260.87930.97940.97650.9323
LVGI 1.02390.92771.48171.08081.1780.83261.38071.10671.3410.9962
TATA -0.0721-0.0878-0.0924-0.0587-0.0707-0.0282-0.0412-0.0548-0.0365-0.0536
M-score -2.65-1.79-3.30-2.61-2.85-2.66-2.70-2.31-2.67-2.60

eBay Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87930.9320.9980.99940.99390.96530.95910.95730.90710.8662
GMI 1.02641.0131.00421.00261.00781.01591.02071.02131.01591.0125
AQI 0.84540.73270.76670.74690.71380.88331.04681.10991.2371.0422
SGI 1.29551.251.20771.17441.15371.15241.14031.13881.1351.129
DEPI 0.94430.97060.98811.00381.01670.99130.96610.92990.91810.9523
SGAI 0.93530.94230.97540.95930.96870.95420.93230.9540.97531.0016
LVGI 0.95261.15491.3411.38421.39181.13270.99621.17651.26951.3296
TATA -0.0419-0.0438-0.0365-0.0435-0.0475-0.0479-0.0536-0.1347-0.1419-0.134
M-score -2.55-2.67-2.67-2.75-2.80-2.68-2.60-3.03-3.10-3.20
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