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eBay Inc (NAS:EBAY)
Beneish M-Score
-3.00 (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 -3.00 suggests that the company is not a manipulator.

EBAY' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -1.36
Current: -3

-3.35
-1.36

During the past 13 years, the highest Beneish M-Score of eBay Inc was -1.36. The lowest was -3.35. And the median was -2.39.


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 * 1.0065+0.528 * 1.016+0.404 * 1.237+0.892 * 1.1351+0.115 * 0.9185
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9754+4.679 * -0.1399-0.327 * 1.2695
=-3.00

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $13,741 Mil.
Revenue was 4366 + 4262 + 4530 + 3892 = $17,050 Mil.
Gross Profit was 2974 + 2911 + 3081 + 2668 = $11,634 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 $1,479 Mil.
Selling, General & Admin. Expense(SGA) was $5,113 Mil.
Total Current Liabilities was $17,538 Mil.
Long-Term Debt was $4,118 Mil.
Net Income was 676 + -2326 + 850 + 689 = $-111 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1494 + 1174 + 1713 + 1334 = $5,715 Mil.
Accounts Receivable was $12,028 Mil.
Revenue was 3877 + 3748 + 3992 + 3404 = $15,021 Mil.
Gross Profit was 2666 + 2596 + 2769 + 2382 = $10,413 Mil.
Total Current Assets was $23,446 Mil.
Total Assets was $38,550 Mil.
Property, Plant and Equipment(Net PPE) was $2,697 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,306 Mil.
Selling, General & Admin. Expense(SGA) was $4,618 Mil.
Total Current Liabilities was $11,670 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)
=(13741 / 17050) / (12028 / 15021)
=0.80592375 / 0.80074562
=1.0065

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)
=(2911 / 15021) / (2974 / 17050)
=0.69322948 / 0.68234604
=1.016

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 - (22378 + 2685) / 41640) / (1 - (23446 + 2697) / 38550)
=0.39810279 / 0.32184176
=1.237

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
=17050 / 15021
=1.1351

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))
=(1306 / (1306 + 2697)) / (1479 / (1479 + 2685))
=0.32625531 / 0.35518732
=0.9185

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)
=(5113 / 17050) / (4618 / 15021)
=0.2998827 / 0.30743626
=0.9754

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)
=((4118 + 17538) / 41640) / ((4123 + 11670) / 38550)
=0.52007685 / 0.40967575
=1.2695

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
=(-111 - 0 - 5715) / 41640
=-0.1399

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 -3.00 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 0.78851.14031.04540.89142.4471.26161.18431.22021.4911.0251
GMI 0.99460.99011.0391.0251.0421.03250.99431.02421.00371.0207
AQI 1.03591.21050.84240.83121.12160.90210.91231.08410.76341.0512
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 1.02390.92771.48171.08081.1780.83261.38071.10671.34640.9922
TATA -0.0721-0.0878-0.0924-0.0587-0.0707-0.0282-0.0412-0.0548-0.033-0.0516
M-score -2.57-2.33-2.82-2.67-1.35-2.34-2.58-2.27-2.20-2.53

eBay Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.25770.92721.30371.49111.54691.58841.28771.02510.98321.0065
GMI 1.02441.02641.0131.00411.00261.00771.01591.02081.02141.016
AQI 1.07790.84540.73270.76340.74690.71380.88331.05121.10991.237
SGI 1.30271.29551.251.20761.17441.15361.15231.14041.13881.1351
DEPI 1.02190.94430.97060.98761.00331.01620.99080.96660.93040.9185
SGAI 0.98080.93530.94230.97530.95920.96860.9540.93250.95420.9754
LVGI 1.10130.95261.15491.34641.38421.39181.13270.99221.17651.2695
TATA -0.0437-0.0419-0.0438-0.0361-0.0433-0.0473-0.0477-0.0516-0.1327-0.1399
M-score -2.16-2.51-2.33-2.22-2.24-2.26-2.38-2.53-2.99-3.00
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