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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 -2.67 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of JetBlue Airways Corp was -1.43. The lowest was -3.67. And the median was -2.67.
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 * 1.1143||+||0.528 * 0.9918||+||0.404 * 0.9788||+||0.892 * 1.0921||+||0.115 * 0.9339|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9909||+||4.679 * -0.0799||-||0.327 * 0.9442|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $129 Mil.|
Revenue was 1365 + 1442 + 1335 + 1299 = $5,441 Mil.
Gross Profit was 696 + 719 + 646 + 616 = $2,677 Mil.
Total Current Assets was $1,056 Mil.
Total Assets was $7,350 Mil.
Property, Plant and Equipment(Net PPE) was $5,656 Mil.
Depreciation, Depletion and Amortization(DDA) was $306 Mil.
Selling, General & Admin. Expense(SGA) was $1,791 Mil.
Total Current Liabilities was $1,874 Mil.
Long-Term Debt was $2,116 Mil.
Net Income was 47 + 71 + 36 + 14 = $168 Mil.
Non Operating Income was -2 + 3 + -4 + 0 = $-3 Mil.
Cash Flow from Operations was 193 + 163 + 197 + 205 = $758 Mil.
|Accounts Receivable was $106 Mil.
Revenue was 1194 + 1308 + 1277 + 1203 = $4,982 Mil.
Gross Profit was 574 + 637 + 637 + 583 = $2,431 Mil.
Total Current Assets was $1,100 Mil.
Total Assets was $7,070 Mil.
Property, Plant and Equipment(Net PPE) was $5,343 Mil.
Depreciation, Depletion and Amortization(DDA) was $269 Mil.
Selling, General & Admin. Expense(SGA) was $1,655 Mil.
Total Current Liabilities was $1,608 Mil.
Long-Term Debt was $2,457 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)|
|=||(129 / 5441)||/||(106 / 4982)|
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)|
|=||(719 / 4982)||/||(696 / 5441)|
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 - (1056 + 5656) / 7350)||/||(1 - (1100 + 5343) / 7070)|
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))|
|=||(269 / (269 + 5343))||/||(306 / (306 + 5656))|
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)|
|=||(1791 / 5441)||/||(1655 / 4982)|
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)|
|=||((2116 + 1874) / 7350)||/||((2457 + 1608) / 7070)|
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|
|=||(168 - -3||-||758)||/||7350|
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 -2.67 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