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Expeditors International of Washington Inc (NAS:EXPD)
Beneish M-Score
-2.10 (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 -2.10 signals that the company is a manipulator.

EXPD' s 10-Year Beneish M-Score Range
Min: -6.32   Max: -1.75
Current: -2.1

-6.32
-1.75

During the past 13 years, the highest Beneish M-Score of Expeditors International of Washington Inc was -1.75. The lowest was -6.32. And the median was -2.50.


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 * 1.0664+0.528 * 1.026+0.404 * 1.8079+0.892 * 1.0797+0.115 * 0.9378
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9596+4.679 * -0.0081-0.327 * 1.179
=-2.10

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,236 Mil.
Revenue was 1768.83 + 1705.105 + 1599.141 + 1491.645 = $6,565 Mil.
Gross Profit was 518.871 + 513.256 + 484.714 + 464.586 = $1,981 Mil.
Total Current Assets was $2,289 Mil.
Total Assets was $2,891 Mil.
Property, Plant and Equipment(Net PPE) was $538 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $1,206 Mil.
Total Current Liabilities was $984 Mil.
Long-Term Debt was $0 Mil.
Net Income was 99.381 + 102.381 + 91.302 + 83.824 = $377 Mil.
Non Operating Income was 0.223 + 2.336 + 3.19 + -0.281 = $5 Mil.
Cash Flow from Operations was 89.532 + 86.691 + 44.886 + 173.857 = $395 Mil.
Accounts Receivable was $1,074 Mil.
Revenue was 1625.859 + 1537.966 + 1503.224 + 1413.208 = $6,080 Mil.
Gross Profit was 478.072 + 484.902 + 471.872 + 448.007 = $1,883 Mil.
Total Current Assets was $2,415 Mil.
Total Assets was $3,015 Mil.
Property, Plant and Equipment(Net PPE) was $563 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $1,164 Mil.
Total Current Liabilities was $870 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)
=(1236.042 / 6564.721) / (1073.5 / 6080.257)
=0.18828553 / 0.17655504
=1.0664

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)
=(513.256 / 6080.257) / (518.871 / 6564.721)
=0.30966668 / 0.30182958
=1.026

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 - (2289.25 + 538.415) / 2890.905) / (1 - (2415.269 + 563.064) / 3014.812)
=0.0218755 / 0.01209993
=1.8079

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
=6564.721 / 6080.257
=1.0797

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))
=(48.071 / (48.071 + 563.064)) / (49.292 / (49.292 + 538.415))
=0.07865856 / 0.08387173
=0.9378

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)
=(1206.264 / 6564.721) / (1164.281 / 6080.257)
=0.18374947 / 0.19148549
=0.9596

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 + 983.783) / 2890.905) / ((0 + 870.2) / 3014.812)
=0.34030278 / 0.28864155
=1.179

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
=(376.888 - 5.468 - 394.966) / 2890.905
=-0.0081

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 -2.10 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98230.96331.01830.78461.41550.84950.90341.13251.02581.0664
GMI 0.82410.97821.00491.02070.84221.19120.921.00670.98911.026
AQI 0.85640.88651.02790.92751.05780.8670.95690.95120.88651.8079
SGI 1.17591.18771.12971.07620.72641.45831.03070.97431.01471.0797
DEPI 0.96331.16521.00040.97281.00631.0841.11670.95370.85170.9378
SGAI 18.86610.990.99781.09481.23070.78651.08011.03641.01740.9596
LVGI 1.01750.9950.9560.85770.95541.05540.86321.0271.0121.179
TATA -0.0518-0.0554-0.0229-0.054-0.0425-0.0231-0.0286-0.0148-0.0225-0.0081
M-score -5.82-2.64-2.43-2.85-2.62-2.24-2.69-2.49-2.62-2.10

Expeditors International of Washington Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.06571.13251.06931.04141.00381.02581.05331.08241.07561.0664
GMI 0.97161.00671.01051.00280.99030.98910.99361.01251.03421.026
AQI 0.92530.95120.98410.93020.92180.88650.88211.72641.73731.8079
SGI 0.95490.97430.98250.99461.00821.01471.02751.04381.07051.0797
DEPI 1.03920.95370.89280.87310.85550.85170.87170.8940.90520.9378
SGAI 1.05781.03641.02431.02051.02431.01741.00940.99150.96750.9596
LVGI 0.95161.0270.99860.95160.97611.0121.11811.16961.18011.179
TATA -0.0257-0.0148-0.0195-0.0139-0.0213-0.0225-0.0243-0.0108-0.0045-0.0081
M-score -2.61-2.49-2.54-2.54-2.62-2.62-2.63-2.18-2.12-2.10
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