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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 -2.18 signals that the company is a manipulator.
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.
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 * 1.0815||+||0.528 * 1.0105||+||0.404 * 1.7264||+||0.892 * 1.0447||+||0.115 * 0.894|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.995||+||4.679 * -0.0108||-||0.327 * 1.1696|
* 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 + 1544.229 + 1531.664 = $5,992 Mil.
Gross Profit was 471.872 + 448.007 + 470.01 + 465.138 = $1,855 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 $1,141 Mil.
Total Current Liabilities was $860 Mil.
Long-Term Debt was $0 Mil.
1. DSRI = Days Sales in Receivables Index
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 / 5992.325)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(464.586 / 5992.325)||/||(484.714 / 6260.105)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)||/||(1140.683 / 5992.325)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(351.022 - 5.766||-||376.989)||/||2929.94|
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 -2.18 signals that the company is likely to be a manipulator.
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
Expeditors International of Washington Inc Annual Data
Expeditors International of Washington Inc Quarterly Data