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eBay Inc (NAS:EBAY)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

EBAY' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -1.79
Current: -2.99

-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 * 0.8025+0.528 * 1.0142+0.404 * 0.7883+0.892 * 1.0783+0.115 * 0.946
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.054+4.679 * -0.0639-0.327 * 1.003
=-2.99

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $662 Mil.
Revenue was 4379 + 4448 + 4921 + 4353 = $18,101 Mil.
Gross Profit was 3031 + 2998 + 3321 + 2964 = $12,314 Mil.
Total Current Assets was $28,549 Mil.
Total Assets was $45,658 Mil.
Property, Plant and Equipment(Net PPE) was $2,781 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,509 Mil.
Selling, General & Admin. Expense(SGA) was $5,763 Mil.
Total Current Liabilities was $17,060 Mil.
Long-Term Debt was $6,757 Mil.
Net Income was 83 + 626 + 1023 + 673 = $2,405 Mil.
Non Operating Income was 0 + 0 + 7 + 0 = $7 Mil.
Cash Flow from Operations was 1156 + 1151 + 1641 + 1368 = $5,316 Mil.
Accounts Receivable was $765 Mil.
Revenue was 4103 + 4262 + 4530 + 3892 = $16,787 Mil.
Gross Profit was 2922 + 2911 + 3081 + 2668 = $11,582 Mil.
Total Current Assets was $22,378 Mil.
Total Assets was $41,640 Mil.
Property, Plant and Equipment(Net PPE) was $2,685 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,339 Mil.
Selling, General & Admin. Expense(SGA) was $5,071 Mil.
Total Current Liabilities was $17,538 Mil.
Long-Term Debt was $4,118 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)
=(662 / 18101) / (765 / 16787)
=0.03657257 / 0.04557098
=0.8025

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)
=(2998 / 16787) / (3031 / 18101)
=0.68993864 / 0.68029391
=1.0142

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 - (28549 + 2781) / 45658) / (1 - (22378 + 2685) / 41640)
=0.31381138 / 0.39810279
=0.7883

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
=18101 / 16787
=1.0783

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))
=(1339 / (1339 + 2685)) / (1509 / (1509 + 2781))
=0.33275348 / 0.35174825
=0.946

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)
=(5763 / 18101) / (5071 / 16787)
=0.3183802 / 0.30207899
=1.054

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)
=((6757 + 17060) / 45658) / ((4118 + 17538) / 41640)
=0.52163914 / 0.52007685
=1.003

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
=(2405 - 7 - 5316) / 45658
=-0.0639

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 -2.99 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.99940.99390.96530.95910.95730.92140.87940.80650.80640.8025
GMI 1.00261.00781.01591.02071.02131.00471.00170.99880.99881.0142
AQI 0.74690.71380.88331.04681.10991.2371.04220.93440.89720.7883
SGI 1.17441.15371.15241.14031.13881.11751.11211.09921.07631.0783
DEPI 1.00381.01670.99130.96610.92990.980.95230.9921.04580.946
SGAI 0.95930.96870.95420.93230.9540.98241.00881.02911.05141.054
LVGI 1.38421.39181.13270.99621.17651.26951.32961.33361.11091.003
TATA -0.0435-0.0475-0.0479-0.0536-0.1347-0.1419-0.134-0.1249-0.0594-0.0639
M-score -2.75-2.80-2.68-2.60-3.03-3.10-3.21-3.30-2.95-2.99
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