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Expeditors International of Washington Inc (NAS:EXPD)
Beneish M-Score
-2.12 (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.

Expeditors International of Washington Inc has a M-score of -2.12 signals that the company is a manipulator.

EXPD' s 10-Year Beneish M-Score Range
Min: -6.32   Max: 0.04
Current: -2.12

-6.32
0.04

During the past 13 years, the highest Beneish M-Score of Expeditors International of Washington Inc was 0.04. The lowest was -6.32. And the median was -2.54.


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 Expeditors International of Washington 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 * 1.0756+0.528 * 1.0342+0.404 * 1.7373+0.892 * 1.0705+0.115 * 0.9052
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9675+4.679 * -0.0045-0.327 * 1.1801
=-2.12

* 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 $1,183 Mil.
Revenue was 1705.105 + 1599.141 + 1491.645 + 1625.859 = $6,422 Mil.
Gross Profit was 513.256 + 484.714 + 464.586 + 478.072 = $1,941 Mil.
Total Current Assets was $2,318 Mil.
Total Assets was $2,926 Mil.
Property, Plant and Equipment(Net PPE) was $545 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General & Admin. Expense(SGA) was $1,194 Mil.
Total Current Liabilities was $963 Mil.
Long-Term Debt was $0 Mil.
Net Income was 102.381 + 91.302 + 83.824 + 83.496 = $361 Mil.
Non Operating Income was 2.336 + 3.19 + -0.281 + 1.645 = $7 Mil.
Cash Flow from Operations was 86.691 + 44.886 + 173.857 + 61.953 = $367 Mil.
Accounts Receivable was $1,028 Mil.
Revenue was 1537.966 + 1503.224 + 1413.208 + 1544.229 = $5,999 Mil.
Gross Profit was 484.902 + 471.872 + 448.007 + 470.01 = $1,875 Mil.
Total Current Assets was $2,498 Mil.
Total Assets was $3,099 Mil.
Property, Plant and Equipment(Net PPE) was $562 Mil.
Depreciation, Depletion and Amortization(DDA) was $46 Mil.
Selling, General & Admin. Expense(SGA) was $1,153 Mil.
Total Current Liabilities was $864 Mil.
Long-Term Debt was $0 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)
=(1183.167 / 6421.75) / (1027.572 / 5998.627)
=0.1842437 / 0.1713012
=1.0756

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)
=(484.714 / 5998.627) / (513.256 / 6421.75)
=0.31253669 / 0.30219613
=1.0342

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 - (2317.972 + 545.366) / 2926.053) / (1 - (2498.211 + 562.125) / 3098.563)
=0.02143331 / 0.01233701
=1.7373

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
=6421.75 / 5998.627
=1.0705

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))
=(46.276 / (46.276 + 562.125)) / (50.03 / (50.03 + 545.366))
=0.07606168 / 0.08402811
=0.9052

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)
=(1194.264 / 6421.75) / (1153.094 / 5998.627)
=0.18597174 / 0.19222632
=0.9675

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)
=((0 + 962.798) / 2926.053) / ((0 + 863.979) / 3098.563)
=0.32904325 / 0.27883216
=1.1801

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
=(361.003 - 6.89 - 367.387) / 2926.053
=-0.0045

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.

Expeditors International of Washington Inc has a M-score of -2.12 signals that the company is likely to 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.

Expeditors International of Washington Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.07340.98230.96331.01830.78461.41550.84950.90341.13251.0258
GMI 1.02510.82410.97821.00491.02070.84221.19120.921.00670.9891
AQI 0.72850.85640.88651.02790.92751.05780.8670.95690.95120.8865
SGI 1.2641.17591.18771.12971.07620.72641.45831.03070.97431.0147
DEPI 1.07820.96331.16521.00040.97281.00631.0841.11670.95370.8517
SGAI 0.951118.86610.990.99781.09481.23070.78651.08011.03641.0174
LVGI 1.03871.01750.9950.9560.85770.95541.05540.86321.0271.012
TATA -0.0393-0.0518-0.0554-0.0229-0.054-0.0425-0.0231-0.0286-0.0148-0.0225
M-score -2.45-5.82-2.64-2.43-2.85-2.62-2.24-2.69-2.49-2.62

Expeditors International of Washington Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.99881.06571.13251.06931.04141.00381.02581.05331.08241.0756
GMI 0.94130.97161.00671.01051.00280.99030.98910.99361.01251.0342
AQI 0.93070.92530.95120.98410.93020.92180.88650.88211.72641.7373
SGI 0.95750.95490.97430.98250.99461.00821.01471.02751.04381.0705
DEPI 1.05921.03920.95370.89280.87310.85550.85170.87170.8940.9052
SGAI 1.08791.05781.03641.02431.02051.02431.01741.00940.99150.9675
LVGI 0.92150.95161.0270.99860.95160.97611.0121.11811.16961.1801
TATA -0.0313-0.0257-0.0148-0.0195-0.0139-0.0213-0.0225-0.0243-0.0108-0.0045
M-score -2.71-2.61-2.49-2.54-2.54-2.62-2.62-2.63-2.18-2.12
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