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JPMorgan Chase & Co (NYSE:JPM)
Beneish M-Score
-2.54 (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 -2.54 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: -2.54

-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 -2.49.


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 * 0.9456+0.528 * 1+0.404 * 1.0004+0.892 * 0.9857+0.115 * 0.904
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0103+4.679 * 0.0023-0.327 * 0.9896
=-2.54

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $64,911 Mil.
Revenue was 24380 + 23239 + 22885 + 22780 = $93,284 Mil.
Gross Profit was 24380 + 23239 + 22885 + 22780 = $93,284 Mil.
Total Current Assets was $0 Mil.
Total Assets was $2,466,096 Mil.
Property, Plant and Equipment(Net PPE) was $14,262 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,146 Mil.
Selling, General & Admin. Expense(SGA) was $38,787 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $315,572 Mil.
Net Income was 6200 + 5520 + 5434 + 6804 = $23,958 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -1524 + -21383 + 16167 + 25124 = $18,384 Mil.
Accounts Receivable was $69,642 Mil.
Revenue was 23812 + 24066 + 22512 + 24246 = $94,636 Mil.
Gross Profit was 23812 + 24066 + 22512 + 24246 = $94,636 Mil.
Total Current Assets was $0 Mil.
Total Assets was $2,449,599 Mil.
Property, Plant and Equipment(Net PPE) was $15,073 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,752 Mil.
Selling, General & Admin. Expense(SGA) was $38,947 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $316,754 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)
=(64911 / 93284) / (69642 / 94636)
=0.6958428 / 0.73589332
=0.9456

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)
=(94636 / 94636) / (93284 / 93284)
=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 + 14262) / 2466096) / (1 - (0 + 15073) / 2449599)
=0.99421677 / 0.99384675
=1.0004

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
=93284 / 94636
=0.9857

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))
=(4752 / (4752 + 15073)) / (5146 / (5146 + 14262))
=0.23969735 / 0.26514839
=0.904

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)
=(38787 / 93284) / (38947 / 94636)
=0.41579478 / 0.41154529
=1.0103

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)
=((315572 + 0) / 2466096) / ((316754 + 0) / 2449599)
=0.1279642 / 0.12930851
=0.9896

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
=(23958 - 0 - 18384) / 2466096
=0.0023

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 -2.54 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 0.38390.93352.60740.74031.01740.92560.99321.07411.10290.6697
GMI 1111111111
AQI 1.00111.00051.00140.99910.99921.0001111.00030.9998
SGI 1.14311.16170.94231.49341.02250.94680.99790.99560.97510.993
DEPI 1.10920.99910.95381.18930.9461.01641.01880.99621.09810.9348
SGAI 1.02450.91081.24190.77031.03451.11231.03611.01351.01961.0107
LVGI 1.21121.20430.85321.05311.09890.78691.03111.04820.97431.1038
TATA 0.04740.0806-0.008-0.05420.01-0.034-0.0016-0.0373-0.0058-0.0208
M-score -2.76-2.07-1.09-2.49-2.44-2.70-2.51-2.61-2.42-2.93

JPMorgan Chase & Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.00230.99981.16641.10290.94930.89460.7810.66970.84620.9456
GMI 1111111111
AQI 1.00010.999911.00031.00020.99990.99990.99980.99991.0004
SGI 0.98310.94540.97680.97511.00851.00980.98230.9930.97310.9857
DEPI 0.92921.00121.11471.09811.1271.08120.97140.93480.91590.904
SGAI 1.01921.03611.02361.01961.00641.01581.01821.01071.01971.0103
LVGI 1.00020.99420.99740.97430.97111.06981.11331.10381.06610.9896
TATA -0.0347-0.00540.0085-0.0058-0.0056-0.0146-0.0257-0.0208-0.00540.0023
M-score -2.67-2.56-2.30-2.42-2.52-2.65-2.86-2.93-2.71-2.54
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