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GuruFocus has detected 3 Warning Signs with JetBlue Airways Corp $JBLU.
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JetBlue Airways Corp (NAS:JBLU)
Beneish M-Score
-2.69 (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.

JetBlue Airways Corp has a M-score of -2.69 suggests that the company is not a manipulator.

JBLU' s Beneish M-Score Range Over the Past 10 Years
Min: -3.25   Max: -1.45
Current: -2.69

-3.25
-1.45

During the past 13 years, the highest Beneish M-Score of JetBlue Airways Corp was -1.45. The lowest was -3.25. And the median was -2.72.


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 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 * 1.2235+0.528 * 0.9392+0.404 * 0.9553+0.892 * 1.0337+0.115 * 0.9615
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0495+4.679 * -0.0921-0.327 * 0.8523
=-2.69

* 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 $172 Mil.
Revenue was 1641 + 1732 + 1643 + 1616 = $6,632 Mil.
Gross Profit was 1106 + 1160 + 1109 + 1153 = $4,528 Mil.
Total Current Assets was $1,567 Mil.
Total Assets was $9,487 Mil.
Property, Plant and Equipment(Net PPE) was $7,271 Mil.
Depreciation, Depletion and Amortization(DDA) was $393 Mil.
Selling, General & Admin. Expense(SGA) was $1,957 Mil.
Total Current Liabilities was $2,223 Mil.
Long-Term Debt was $1,195 Mil.
Net Income was 180 + 199 + 180 + 199 = $758 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 315 + 310 + 422 + 585 = $1,632 Mil.
Accounts Receivable was $136 Mil.
Revenue was 1594 + 1687 + 1612 + 1523 = $6,416 Mil.
Gross Profit was 1067 + 1092 + 994 + 961 = $4,114 Mil.
Total Current Assets was $1,373 Mil.
Total Assets was $8,644 Mil.
Property, Plant and Equipment(Net PPE) was $6,652 Mil.
Depreciation, Depletion and Amortization(DDA) was $345 Mil.
Selling, General & Admin. Expense(SGA) was $1,804 Mil.
Total Current Liabilities was $2,275 Mil.
Long-Term Debt was $1,379 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)
=(172 / 6632) / (136 / 6416)
=0.02593486 / 0.02119701
=1.2235

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)
=(4114 / 6416) / (4528 / 6632)
=0.64120948 / 0.6827503
=0.9392

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 - (1567 + 7271) / 9487) / (1 - (1373 + 6652) / 8644)
=0.0684094 / 0.07161037
=0.9553

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
=6632 / 6416
=1.0337

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))
=(345 / (345 + 6652)) / (393 / (393 + 7271))
=0.04930685 / 0.05127871
=0.9615

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)
=(1957 / 6632) / (1804 / 6416)
=0.29508444 / 0.28117207
=1.0495

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)
=((1195 + 2223) / 9487) / ((1379 + 2275) / 8644)
=0.36028249 / 0.42272096
=0.8523

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
=(758 - 0 - 1632) / 9487
=-0.0921

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 -2.69 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.

JetBlue Airways Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.99340.78410.97110.90171.00880.94881.11430.98610.90661.2235
GMI 0.3841.14810.841.26011.23291.0160.99180.94080.81560.9392
AQI 0.42712.31690.59051.55690.91821.07560.97880.83330.990.9553
SGI 1.20271.19210.96991.151.19181.10611.09211.06911.1031.0337
DEPI 1.05420.90630.93431.01720.97631.0090.93391.01021.03040.9615
SGAI 2.44040.92171.13111.00370.89860.98450.99631.05041.07251.0495
LVGI 0.95560.95630.95010.95661.00990.95390.94420.91740.84880.8523
TATA -0.0684-0.0096-0.0653-0.0652-0.0742-0.0806-0.0803-0.0959-0.1065-0.092
M-score -3.41-1.92-3.10-2.36-2.55-2.75-2.67-2.96-3.03-2.69

JetBlue Airways Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.11020.98611.06810.85890.94040.90660.8610.99260.92631.2235
GMI 0.94430.94080.90180.88080.83810.81560.83770.85560.89870.9392
AQI 1.03150.83330.91340.90570.88330.990.82070.85750.91190.9553
SGI 1.08841.06911.09111.08161.09271.1031.08651.07041.05061.0337
DEPI 0.98131.01021.04151.05261.03051.03041.030.98030.96620.9615
SGAI 1.04341.05041.02441.03381.04951.07251.09031.09011.0711.0495
LVGI 0.90810.91740.88070.90860.89310.84880.84650.86260.84880.8523
TATA -0.1032-0.0961-0.0995-0.0968-0.1055-0.1065-0.1011-0.1002-0.089-0.0921
M-score -2.78-2.96-2.85-3.06-3.05-3.03-3.12-3.00-2.97-2.69
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