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eBay Inc (NAS:EBAY)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

EBAY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.68   Max: -1.89
Current: -2.76

-3.68
-1.89

During the past 13 years, the highest Beneish M-Score of eBay Inc was -1.89. The lowest was -3.68. And the median was -2.75.


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 * 0.4315+0.528 * 1.2215+0.404 * 1.2922+0.892 * 1.8262+0.115 * 0.159
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8405+4.679 * -0.1301-0.327 * 1.1447
=-2.76

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $595 Mil.
Revenue was 2099 + 4379 + 4448 + 2323 = $13,249 Mil.
Gross Profit was 1666 + 3031 + 2998 + 1881 = $9,576 Mil.
Total Current Assets was $8,280 Mil.
Total Assets was $18,338 Mil.
Property, Plant and Equipment(Net PPE) was $1,535 Mil.
Depreciation, Depletion and Amortization(DDA) was $680 Mil.
Selling, General & Admin. Expense(SGA) was $4,588 Mil.
Total Current Liabilities was $4,436 Mil.
Long-Term Debt was $6,814 Mil.
Net Income was 539 + 83 + 626 + 1023 = $2,271 Mil.
Non Operating Income was 0 + 0 + 0 + 23 = $23 Mil.
Cash Flow from Operations was 686 + 1156 + 1151 + 1641 = $4,634 Mil.
Accounts Receivable was $755 Mil.
Revenue was 2150 + 4103 + 4262 + -3260 = $7,255 Mil.
Gross Profit was 1737 + 2922 + 2911 + -1165 = $6,405 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 $145 Mil.
Selling, General & Admin. Expense(SGA) was $2,989 Mil.
Total Current Liabilities was $16,491 Mil.
Long-Term Debt was $7,346 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)
=(595 / 13249) / (755 / 7255)
=0.04490905 / 0.10406616
=0.4315

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)
=(3031 / 7255) / (1666 / 13249)
=0.88283942 / 0.72277153
=1.2215

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 - (8280 + 1535) / 18338) / (1 - (25654 + 2825) / 44476)
=0.4647726 / 0.35967713
=1.2922

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
=13249 / 7255
=1.8262

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))
=(145 / (145 + 2825)) / (680 / (680 + 1535))
=0.04882155 / 0.30699774
=0.159

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)
=(4588 / 13249) / (2989 / 7255)
=0.34629029 / 0.41199173
=0.8405

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)
=((6814 + 4436) / 18338) / ((7346 + 16491) / 44476)
=0.61348021 / 0.53595197
=1.1447

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
=(2271 - 23 - 4634) / 18338
=-0.1301

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 -2.76 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 0.51870.9510.81350.91641.06281.17950.9981.86390.62691.0554
GMI 1.0391.0251.0421.03250.99431.02421.00370.85491.01051.0213
AQI 0.84240.83121.12160.90210.91231.08410.76671.04681.01871.2346
SGI 1.31131.28521.11331.02181.04911.27261.20770.58681.06460.9775
DEPI 0.90811.01030.93120.98331.14441.03790.98811.68470.61351.0261
SGAI 1.07950.92280.83971.12260.87930.97940.97651.15041.03471.0409
LVGI 1.48171.08081.1780.83261.38071.10671.3410.99621.33360.9439
TATA -0.0924-0.0587-0.0707-0.0282-0.0412-0.0548-0.0365-0.0542-0.1253-0.1442
M-score -3.30-2.61-2.85-2.66-2.70-2.31-2.67-2.31-3.50-3.00

eBay Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.96531.86391.80761.71912.09080.42930.58450.58540.43150.9997
GMI 1.01590.85490.86530.85010.78141.11291.10221.12411.22151.024
AQI 0.88331.04681.10991.2371.04221.01870.89720.78831.29221.2346
SGI 1.15240.58680.60310.59890.46781.55481.48491.47831.82621.0319
DEPI 0.99131.68471.55621.78786.72640.61351.11750.9060.1591.0261
SGAI 0.95421.15041.16571.20441.36130.90780.94120.94260.84051.0456
LVGI 1.13270.99621.17651.26951.32961.33361.11091.0031.14470.9439
TATA -0.0479-0.0542-0.1354-0.1426-0.1346-0.1253-0.0597-0.0643-0.1301-0.1298
M-score -2.68-2.31-2.77-2.86-2.19-3.17-2.71-2.76-2.76-2.94
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