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Expeditors International of Washington Inc (NAS:EXPD)
Beneish M-Score
-2.19 (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 -2.19 signals that the company is a manipulator.

EXPD' s 10-Year Beneish M-Score Range
Min: -6.01   Max: 0.04
Current: -2.19

-6.01
0.04

During the past 13 years, the highest Beneish M-Score of Expeditors International of Washington Inc was 0.04. The lowest was -6.01. And the median was -2.53.


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 * 1.0795+0.528 * 1.0063+0.404 * 1.7264+0.892 * 1.0467+0.115 * 0.894
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0024+4.679 * -0.0108-0.327 * 1.1696
=-2.19

* 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 $1,151 Mil.
Revenue was 1599.141 + 1491.645 + 1634.23 + 1535.089 = $6,260 Mil.
Gross Profit was 484.714 + 464.586 + 486.443 + 482.025 = $1,918 Mil.
Total Current Assets was $2,310 Mil.
Total Assets was $2,930 Mil.
Property, Plant and Equipment(Net PPE) was $556 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General & Admin. Expense(SGA) was $1,186 Mil.
Total Current Liabilities was $962 Mil.
Long-Term Debt was $0 Mil.
Net Income was 91.302 + 83.824 + 83.496 + 92.4 = $351 Mil.
Non Operating Income was 3.19 + -0.281 + 1.645 + 1.212 = $6 Mil.
Cash Flow from Operations was 44.886 + 173.857 + 61.953 + 96.293 = $377 Mil.
Accounts Receivable was $1,018 Mil.
Revenue was 1503.224 + 1413.208 + 1532.957 + 1531.664 = $5,981 Mil.
Gross Profit was 471.872 + 448.007 + 458.738 + 465.138 = $1,844 Mil.
Total Current Assets was $2,476 Mil.
Total Assets was $3,064 Mil.
Property, Plant and Equipment(Net PPE) was $550 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $1,130 Mil.
Total Current Liabilities was $860 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)
=(1150.531 / 6260.105) / (1018.337 / 5981.053)
=0.18378781 / 0.17026049
=1.0795

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)
=(464.586 / 5981.053) / (484.714 / 6260.105)
=0.30826595 / 0.30634758
=1.0063

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 - (2310.47 + 556.228) / 2929.94) / (1 - (2475.778 + 549.583) / 3063.665)
=0.02158474 / 0.01250267
=1.7264

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
=6260.105 / 5981.053
=1.0467

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))
=(43.677 / (43.677 + 549.583)) / (49.918 / (49.918 + 556.228))
=0.07362202 / 0.0823531
=0.894

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)
=(1185.657 / 6260.105) / (1130.147 / 5981.053)
=0.1893989 / 0.18895452
=1.0024

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 + 962.231) / 2929.94) / ((0 + 860.213) / 3063.665)
=0.32841321 / 0.28077907
=1.1696

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
=(351.022 - 5.766 - 376.989) / 2929.94
=-0.0108

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 -2.19 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 1.07340.98230.96331.01830.78461.41550.84950.90341.13461.0238
GMI 1.02510.82410.97821.00491.02070.84221.19120.921.0110.9849
AQI 0.72850.85640.88651.02790.92751.05780.8670.95690.95120.8865
SGI 1.2641.17591.18771.12971.07620.72641.45831.03070.97241.0166
DEPI 1.07820.96331.16521.00040.97281.00631.0841.08490.98170.8517
SGAI 0.951118.86610.990.99781.09481.23070.78651.08011.02861.025
LVGI 1.03871.01750.9950.9560.85770.95541.05540.86321.0271.012
TATA -0.0393-0.0518-0.0554-0.0229-0.054-0.0425-0.0231-0.0286-0.0152-0.0225
M-score -2.45-5.82-2.64-2.43-2.85-2.62-2.24-2.69-2.48-2.63

Expeditors International of Washington Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.94760.99881.06571.13461.07131.04341.00621.02291.05041.0795
GMI 0.94530.96071.00131.0111.01481.0070.99550.98290.98741.0063
AQI 0.92750.93070.92530.95120.98410.93020.92180.88650.88211.7264
SGI 0.97970.95750.95490.97240.98060.99281.00581.01751.03031.0467
DEPI 1.05951.02961.01080.98170.91870.89820.87950.85170.87170.894
SGAI 1.09781.08791.05781.02861.01671.0131.01491.02861.02051.0024
LVGI 0.85560.92150.95161.0270.99860.95160.97611.0121.11811.1696
TATA -0.022-0.0316-0.0261-0.0152-0.0197-0.014-0.0214-0.0225-0.0243-0.0108
M-score -2.67-2.70-2.60-2.48-2.53-2.53-2.61-2.63-2.63-2.19
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