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JPMorgan Chase & Co (NYSE:JPM)
Beneish M-Score
-2.71 (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.

JPMorgan Chase & Co has a M-score of -2.71 suggests that the company is not a manipulator.

JPM' s Beneish M-Score Range Over the Past 10 Years
Min: -2.97   Max: 4.35
Current: -2.71

-2.97
4.35

During the past 13 years, the highest Beneish M-Score of JPMorgan Chase & Co was 4.35. The lowest was -2.97. And the median was -2.47.


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 JPMorgan Chase & Co 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 * 0.8523+0.528 * 1+0.404 * 0.9999+0.892 * 0.9662+0.115 * 0.9159
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0271+4.679 * -0.0054-0.327 * 1.0661
=-2.71

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $57,649 Mil.
Revenue was 23239 + 22885 + 22780 + 23812 = $92,716 Mil.
Gross Profit was 23239 + 22885 + 22780 + 23812 = $92,716 Mil.
Total Current Assets was $0 Mil.
Total Assets was $2,423,808 Mil.
Property, Plant and Equipment(Net PPE) was $14,195 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,048 Mil.
Selling, General & Admin. Expense(SGA) was $38,507 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $310,457 Mil.
Net Income was 5520 + 5434 + 6804 + 6290 = $24,048 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -21383 + 16167 + 25124 + 17296 = $37,204 Mil.
Accounts Receivable was $70,006 Mil.
Revenue was 24066 + 22750 + 24469 + 24678 = $95,963 Mil.
Gross Profit was 24066 + 22750 + 24469 + 24678 = $95,963 Mil.
Total Current Assets was $0 Mil.
Total Assets was $2,577,148 Mil.
Property, Plant and Equipment(Net PPE) was $14,963 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,732 Mil.
Selling, General & Admin. Expense(SGA) was $38,805 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $309,643 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)
=(57649 / 92716) / (70006 / 95963)
=0.62178049 / 0.72951033
=0.8523

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)
=(95963 / 95963) / (92716 / 92716)
=1 / 1
=1

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 - (0 + 14195) / 2423808) / (1 - (0 + 14963) / 2577148)
=0.99414351 / 0.99419397
=0.9999

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
=92716 / 95963
=0.9662

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))
=(4732 / (4732 + 14963)) / (5048 / (5048 + 14195))
=0.24026403 / 0.26232916
=0.9159

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)
=(38507 / 92716) / (38805 / 95963)
=0.41532206 / 0.4043746
=1.0271

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)
=((310457 + 0) / 2423808) / ((309643 + 0) / 2577148)
=0.12808647 / 0.12014948
=1.0661

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
=(24048 - 0 - 37204) / 2423808
=-0.0054

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.

JPMorgan Chase & Co has a M-score of -2.71 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 own currency.

JPMorgan Chase & Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.38950.93352.60740.74031.01740.92560.99321.07411.10290.6697
GMI 1111111111
AQI 1.00111.00051.00140.99910.99921.0001111.00030.9998
SGI 1.12661.16170.94231.49341.02250.94680.99790.99560.97510.993
DEPI 1.10920.99910.95381.18930.9461.01641.01880.99621.09810.9348
SGAI 0.9240.91081.0570.9051.03451.11231.03611.01351.01961.0107
LVGI 1.21121.20430.85321.27360.90870.8540.951.04820.97311.105
TATA 0.04740.0806-0.008-0.05420.01-0.034-0.0016-0.0373-0.0058-0.0208
M-score -2.75-2.07-1.06-2.58-2.38-2.72-2.48-2.61-2.42-2.93

JPMorgan Chase & Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.06570.9920.98711.14911.1010.95240.90170.79080.67620.8523
GMI 1111111111
AQI 11.00010.999911.00031.00020.99990.99990.99980.9999
SGI 1.00350.99330.95760.99150.97681.00531.00180.97020.98350.9662
DEPI 0.99620.92921.00121.11471.09811.1271.08120.97140.93480.9159
SGAI 1.00561.00871.02291.00841.01791.00961.02391.03091.02041.0271
LVGI 1.04821.00020.99420.99740.97310.97111.06981.11331.1051.0661
TATA -0.0373-0.0347-0.00540.0084-0.0058-0.0056-0.0146-0.0257-0.0208-0.0054
M-score -2.61-2.67-2.56-2.30-2.42-2.52-2.65-2.86-2.94-2.71
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