PayPal Holdings (BUE:PYPL) Beneish M-Score

: -2.47 (As of Today)

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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.47 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for PayPal Holdings's Beneish M-Score or its related term are showing as below:

BUE:PYPL' s Beneish M-Score Range Over the Past 10 Years
Min: -2.79 Med: -2.45 Max: -2.26
Current: -2.47

During the past 12 years, the highest Beneish M-Score of PayPal Holdings was -2.26. The lowest was -2.79. And the median was -2.45.

PayPal Holdings Beneish M-Score Historical Data

The historical data trend for PayPal Holdings's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

PayPal Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

-2.45

-2.42

-2.40

-2.59

-2.47

PayPal Holdings Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score																-2.59	-2.60	-2.50	-2.45	-2.47

Competitive Comparison

For the Credit Services subindustry, PayPal Holdings's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

PayPal Holdings Beneish M-Score Distribution

For the Credit Services industry and Financial Services sector, PayPal Holdings's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where PayPal Holdings's Beneish M-Score falls into.

PayPal Holdings Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 PayPal Holdings for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9517

0.528 * 1.0899

0.404 * 0.89

0.892 * 2.3307

0.115 * 1.037

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8306

4.679 * -0.014319

0.327 * 1.0038

-1.37

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was ARS16,606,000 Mil.
Revenue was 2897386.003 + 2595929.172 + 1748879.986 + 1390752.032 = ARS8,632,947 Mil.
Gross Profit was 1325592.001 + 1178981.582 + 803519.994 + 654878.265 = ARS3,962,972 Mil.
Total Current Assets was ARS22,587,409 Mil.
Total Assets was ARS29,661,926 Mil.
Property, Plant and Equipment(Net PPE) was ARS537,168 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS307,328 Mil.
Selling, General, & Admin. Expense(SGA) was ARS1,116,052 Mil.
Total Current Liabilities was ARS17,496,226 Mil.
Long-Term Debt & Capital Lease Obligation was ARS3,493,036 Mil.
Net Income was 506122 + 356949.01 + 246959.998 + 157052.254 = ARS1,267,083 Mil.
Non Operating Income was 119491 + -1399.8 + 28080 + -21730.501 = ARS124,441 Mil.
Cash Flow from Operations was 943654.001 + 440587.062 + -48000 + 231133.505 = ARS1,567,375 Mil.

Total Receivables was ARS7,486,913 Mil.
Revenue was 1237759.916 + 951251.686 + 818965.991 + 696093.03 = ARS3,704,071 Mil.
Gross Profit was 615443.133 + 485074.443 + 398773.626 + 354005.664 = ARS1,853,297 Mil.
Total Current Assets was ARS9,627,133 Mil.
Total Assets was ARS13,181,313 Mil.
Property, Plant and Equipment(Net PPE) was ARS290,034 Mil.
Depreciation, Depletion and Amortization(DDA) was ARS175,795 Mil.
Selling, General, & Admin. Expense(SGA) was ARS576,511 Mil.
Total Current Liabilities was ARS7,545,591 Mil.
Long-Term Debt & Capital Lease Obligation was ARS1,746,410 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(16606000.015 / 8632947.193)	/	(7486913.493 / 3704070.623)
	=	1.923561	/	2.021266
	=	0.9517

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)
	=	(1853296.866 / 3704070.623)	/	(3962971.842 / 8632947.193)
	=	0.500341	/	0.459052
	=	1.0899

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (22587409.02 + 537168) / 29661926.027)	/	(1 - (9627133.334 + 290034.492) / 13181313.235)
	=	0.220395	/	0.247634
	=	0.89

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	8632947.193	/	3704070.623
	=	2.3307

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(175795.322 / (175795.322 + 290034.492))	/	(307328.003 / (307328.003 + 537168))
	=	0.377381	/	0.363919
	=	1.037

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(1116052.211 / 8632947.193)	/	(576510.803 / 3704070.623)
	=	0.129278	/	0.155642
	=	0.8306

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((3493036.003 + 17496226.016) / 29661926.027)	/	((1746410.002 + 7545590.991) / 13181313.235)
	=	0.707616	/	0.704937
	=	1.0038

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
	=	(1267083.262 - 124440.699	-	1567374.568)	/	29661926.027
	=	-0.014319

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

PayPal Holdings has a M-score of -1.37 signals that the company is likely to be a manipulator.

PayPal Holdings Beneish M-Score Related Terms

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PayPal Holdings (BUE:PYPL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » PayPal Holdings Inc (BUE:PYPL) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

PYPL:USA PYPL:Peru PYPL:Mexico PYPL_KZ:Kazakhstan 1PYPL:Italy 2PPd:UK 0R9U:UK 2PP:Germany PYPL:Canada PYPL34:Brazil PYPL:Austria

Address

2211 North First Street, San Jose, CA, USA, 95131

Website

https://www.paypal.com

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 435 million active accounts at the end of 2022. The company also owns Venmo, a person-to-person payment platform.