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eBay Inc (NAS:EBAY)
Beneish M-Score
-3.10 (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 -3.10 suggests that the company is not a manipulator.

EBAY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.58   Max: -1.72
Current: -3.1

-3.58
-1.72

During the past 13 years, the highest Beneish M-Score of eBay Inc was -1.72. The lowest was -3.58. And the median was -2.63.


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 * 0.8287+0.528 * 1.0287+0.404 * 1.2502+0.892 * 1.0282+0.115 * 0.4263
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9914+4.679 * -0.1121-0.327 * 1.0436
=-3.10

* 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 $599 Mil.
Revenue was 2137 + 2322 + 2099 + 4379 = $10,937 Mil.
Gross Profit was 1660 + 1829 + 1666 + 3031 = $8,186 Mil.
Total Current Assets was $9,703 Mil.
Total Assets was $19,608 Mil.
Property, Plant and Equipment(Net PPE) was $1,497 Mil.
Depreciation, Depletion and Amortization(DDA) was $694 Mil.
Selling, General & Admin. Expense(SGA) was $3,893 Mil.
Total Current Liabilities was $2,107 Mil.
Long-Term Debt was $9,030 Mil.
Net Income was 482 + 477 + 539 + 83 = $1,581 Mil.
Non Operating Income was 0 + 256 + 0 + 0 = $256 Mil.
Cash Flow from Operations was 641 + 1040 + 686 + 1156 = $3,523 Mil.
Accounts Receivable was $703 Mil.
Revenue was 2061 + 2323 + 2150 + 4103 = $10,637 Mil.
Gross Profit was 1650 + 1881 + 1737 + 2922 = $8,190 Mil.
Total Current Assets was $26,514 Mil.
Total Assets was $44,841 Mil.
Property, Plant and Equipment(Net PPE) was $2,947 Mil.
Depreciation, Depletion and Amortization(DDA) was $460 Mil.
Selling, General & Admin. Expense(SGA) was $3,819 Mil.
Total Current Liabilities was $17,611 Mil.
Long-Term Debt was $6,795 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)
=(599 / 10937) / (703 / 10637)
=0.05476822 / 0.06609006
=0.8287

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)
=(1829 / 10637) / (1660 / 10937)
=0.76995393 / 0.7484685
=1.0287

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 - (9703 + 1497) / 19608) / (1 - (26514 + 2947) / 44841)
=0.42880457 / 0.34298967
=1.2502

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
=10937 / 10637
=1.0282

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))
=(460 / (460 + 2947)) / (694 / (694 + 1497))
=0.13501614 / 0.31675034
=0.4263

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)
=(3893 / 10937) / (3819 / 10637)
=0.3559477 / 0.3590298
=0.9914

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)
=((9030 + 2107) / 19608) / ((6795 + 17611) / 44841)
=0.56798246 / 0.54427867
=1.0436

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
=(1581 - 256 - 3523) / 19608
=-0.1121

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 -3.10 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.51870.9510.81350.91641.06281.17950.9980.95910.59832.1495
GMI 1.0391.0251.0421.03250.99441.0241.00381.02071.00940.8563
AQI 0.84240.83121.12160.90210.91231.08410.76671.04681.01871.2346
SGI 1.31131.28521.11331.02181.04911.27251.20771.14031.11560.4799
DEPI 0.95861.01030.93120.98331.14391.03830.98810.96610.67221.6332
SGAI 1.08720.92280.83971.12260.8730.98660.97640.93231.02191.3004
LVGI 1.48171.08081.1780.83261.38071.10671.3410.99621.33360.9439
TATA -0.0832-0.1492-0.0707-0.0282-0.0429-0.0547-0.0365-0.0536-0.1249-0.1442
M-score -3.25-3.04-2.85-2.66-2.70-2.31-2.67-2.60-3.47-2.50

eBay Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.86391.80761.71912.09080.42930.71560.71340.52641.21950.8287
GMI 0.85490.86530.85010.78141.11291.04841.07221.16550.97791.0287
AQI 1.04681.10991.2371.04221.01870.89720.78831.29221.23461.2502
SGI 0.58680.60310.59890.46781.55481.21271.2131.49720.8461.0282
DEPI 1.68471.55621.78786.72640.61351.55360.9060.1591.02610.4263
SGAI 1.15041.16571.20441.36130.90780.98750.99090.88271.09870.9914
LVGI 0.99621.17651.26951.32961.33361.11091.0031.14470.94391.0436
TATA -0.0542-0.1354-0.1426-0.1346-0.1253-0.0597-0.0643-0.1301-0.1442-0.1121
M-score -2.31-2.77-2.86-2.19-3.17-2.82-2.91-3.00-3.00-3.10
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