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GuruFocus has detected 4 Warning Signs with Expeditors International of Washington Inc $EXPD.
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Expeditors International of Washington Inc (NAS:EXPD)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

EXPD' s Beneish M-Score Range Over the Past 10 Years
Min: -4.6   Max: -1.65
Current: -2.82

-4.6
-1.65

During the past 13 years, the highest Beneish M-Score of Expeditors International of Washington Inc was -1.65. The lowest was -4.60. 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 * 1.161+0.528 * 0.9317+0.404 * 0.5103+0.892 * 0.9216+0.115 * 1.005
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1021+4.679 * -0.0371-0.327 * 0.9924
=-2.82

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,190 Mil.
Revenue was 1642.007 + 1562.394 + 1475.164 + 1418.472 = $6,098 Mil.
Gross Profit was 548.591 + 545.259 + 553.117 + 517.069 = $2,164 Mil.
Total Current Assets was $2,219 Mil.
Total Assets was $2,791 Mil.
Property, Plant and Equipment(Net PPE) was $537 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $1,308 Mil.
Total Current Liabilities was $930 Mil.
Long-Term Debt was $0 Mil.
Net Income was 110.59 + 107.581 + 116.052 + 96.584 = $431 Mil.
Non Operating Income was 1.706 + 0.925 + 1.603 + 0.879 = $5 Mil.
Cash Flow from Operations was 72.408 + 115.686 + 105.052 + 235.953 = $529 Mil.
Accounts Receivable was $1,112 Mil.
Revenue was 1596.221 + 1651.332 + 1691.553 + 1677.526 = $6,617 Mil.
Gross Profit was 536.169 + 569.981 + 552.141 + 529.486 = $2,188 Mil.
Total Current Assets was $1,977 Mil.
Total Assets was $2,566 Mil.
Property, Plant and Equipment(Net PPE) was $525 Mil.
Depreciation, Depletion and Amortization(DDA) was $46 Mil.
Selling, General & Admin. Expense(SGA) was $1,288 Mil.
Total Current Liabilities was $861 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)
=(1190.13 / 6098.037) / (1112.26 / 6616.632)
=0.19516608 / 0.16810063
=1.161

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)
=(2187.777 / 6616.632) / (2164.036 / 6098.037)
=0.33064813 / 0.3548742
=0.9317

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 - (2218.579 + 536.572) / 2790.871) / (1 - (1976.509 + 524.724) / 2565.577)
=0.01279887 / 0.02507974
=0.5103

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
=6098.037 / 6616.632
=0.9216

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))
=(46.012 / (46.012 + 524.724)) / (46.796 / (46.796 + 536.572))
=0.08061871 / 0.08021695
=1.005

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)
=(1308.21 / 6098.037) / (1287.971 / 6616.632)
=0.21452969 / 0.19465659
=1.1021

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 + 929.931) / 2790.871) / ((0 + 861.373) / 2565.577)
=0.33320458 / 0.33574241
=0.9924

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
=(430.807 - 5.113 - 529.099) / 2790.871
=-0.0371

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 -2.82 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 local exchange's currency.

Expeditors International of Washington Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.01830.78461.41550.84950.90181.13451.02581.06640.89281.161
GMI 1.00491.02070.84221.19120.91631.01070.98911.0260.91280.9317
AQI 1.02790.92751.05780.8670.95690.95120.88651.80791.14650.5103
SGI 1.12971.07620.72641.45831.03250.97251.01471.07971.00790.9216
DEPI 1.00040.97281.00631.12261.07840.95370.85170.93781.04041.005
SGAI 0.99781.09481.23070.78651.08791.02891.01740.95961.05941.1021
LVGI 0.9560.85770.95541.05540.86321.0271.0121.1790.98660.9924
TATA -0.0229-0.054-0.0425-0.0231-0.0282-0.0148-0.0225-0.0081-0.0438-0.0371
M-score -2.43-2.85-2.62-2.24-2.70-2.48-2.62-2.10-2.76-2.82

Expeditors International of Washington Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.07561.06641.0760.94870.93240.89280.8560.9811.06621.161
GMI 1.03421.0261.01740.98980.94530.91280.88590.87160.89930.9317
AQI 1.73731.80791.80720.97161.05071.14651.14570.69670.60170.5103
SGI 1.07051.07971.09611.09411.05721.00790.94180.89740.89140.9216
DEPI 0.90520.93780.96851.0131.04471.04041.04881.03631.01571.005
SGAI 0.96750.95960.95650.97371.01471.05941.11671.1541.13761.1021
LVGI 1.18011.1791.07951.03181.02690.98660.95850.97460.97570.9924
TATA -0.0045-0.00810.0131-0.0247-0.0344-0.0438-0.0839-0.0545-0.0517-0.0371
M-score -2.12-2.10-1.95-2.58-2.67-2.76-3.06-3.05-2.99-2.82
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