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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.
JetBlue Airways Corp has a M-score of -2.97 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of JetBlue Airways Corp was -1.03. The lowest was -3.67. And the median was -2.70.
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 JetBlue Airways Corp 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 * 0.8723||+||0.528 * 0.971||+||0.404 * 1.008||+||0.892 * 1.0813||+||0.115 * 0.9297|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0147||+||4.679 * -0.0934||-||0.327 * 0.9674|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $133 Mil.|
Revenue was 1349 + 1365 + 1442 + 1335 = $5,491 Mil.
Gross Profit was 683 + 696 + 719 + 646 = $2,744 Mil.
Total Current Assets was $1,356 Mil.
Total Assets was $7,645 Mil.
Property, Plant and Equipment(Net PPE) was $5,652 Mil.
Depreciation, Depletion and Amortization(DDA) was $316 Mil.
Selling, General & Admin. Expense(SGA) was $1,850 Mil.
Total Current Liabilities was $1,975 Mil.
Long-Term Debt was $2,332 Mil.
Net Income was 4 + 47 + 71 + 36 = $158 Mil.
Non Operating Income was 0 + -2 + 3 + -4 = $-3 Mil.
Cash Flow from Operations was 322 + 193 + 163 + 197 = $875 Mil.
|Accounts Receivable was $141 Mil.
Revenue was 1299 + 1194 + 1308 + 1277 = $5,078 Mil.
Gross Profit was 616 + 574 + 637 + 637 = $2,464 Mil.
Total Current Assets was $1,286 Mil.
Total Assets was $7,234 Mil.
Property, Plant and Equipment(Net PPE) was $5,350 Mil.
Depreciation, Depletion and Amortization(DDA) was $277 Mil.
Selling, General & Admin. Expense(SGA) was $1,686 Mil.
Total Current Liabilities was $1,962 Mil.
Long-Term Debt was $2,251 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)|
|=||(133 / 5491)||/||(141 / 5078)|
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)|
|=||(696 / 5078)||/||(683 / 5491)|
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 - (1356 + 5652) / 7645)||/||(1 - (1286 + 5350) / 7234)|
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))|
|=||(277 / (277 + 5350))||/||(316 / (316 + 5652))|
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)|
|=||(1850 / 5491)||/||(1686 / 5078)|
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)|
|=||((2332 + 1975) / 7645)||/||((2251 + 1962) / 7234)|
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|
|=||(158 - -3||-||875)||/||7645|
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.
JetBlue Airways Corp has a M-score of -2.97 suggests that the company will not 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
JetBlue Airways Corp Annual Data
JetBlue Airways Corp Quarterly Data