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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
-2.75 (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 -2.75 suggests that the company is not a manipulator.

JBLU' s Beneish M-Score Range Over the Past 10 Years
Min: -3.32   Max: -1.35
Current: -2.75

-3.32
-1.35

During the past 13 years, the highest Beneish M-Score of JetBlue Airways Corp was -1.35. The lowest was -3.32. And the median was -2.74.


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 * 1.146+0.528 * 0.9992+0.404 * 0.9228+0.892 * 1.0171+0.115 * 0.9538
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0443+4.679 * -0.0881-0.327 * 0.8953
=-2.75

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $169 Mil.
Revenue was 1604 + 1641 + 1732 + 1643 = $6,620 Mil.
Gross Profit was 1008 + 1106 + 1160 + 1109 = $4,383 Mil.
Total Current Assets was $1,469 Mil.
Total Assets was $9,473 Mil.
Property, Plant and Equipment(Net PPE) was $7,458 Mil.
Depreciation, Depletion and Amortization(DDA) was $407 Mil.
Selling, General & Admin. Expense(SGA) was $1,984 Mil.
Total Current Liabilities was $2,422 Mil.
Long-Term Debt was $1,140 Mil.
Net Income was 85 + 180 + 199 + 180 = $644 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 432 + 315 + 310 + 422 = $1,479 Mil.
Accounts Receivable was $145 Mil.
Revenue was 1616 + 1594 + 1687 + 1612 = $6,509 Mil.
Gross Profit was 1153 + 1067 + 1092 + 994 = $4,306 Mil.
Total Current Assets was $1,774 Mil.
Total Assets was $9,062 Mil.
Property, Plant and Equipment(Net PPE) was $6,722 Mil.
Depreciation, Depletion and Amortization(DDA) was $349 Mil.
Selling, General & Admin. Expense(SGA) was $1,868 Mil.
Total Current Liabilities was $2,474 Mil.
Long-Term Debt was $1,332 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)
=(169 / 6620) / (145 / 6509)
=0.0255287 / 0.02227685
=1.146

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)
=(4306 / 6509) / (4383 / 6620)
=0.66154555 / 0.66208459
=0.9992

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 - (1469 + 7458) / 9473) / (1 - (1774 + 6722) / 9062)
=0.0576375 / 0.06245862
=0.9228

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
=6620 / 6509
=1.0171

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))
=(349 / (349 + 6722)) / (407 / (407 + 7458))
=0.04935653 / 0.05174825
=0.9538

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)
=(1984 / 6620) / (1868 / 6509)
=0.29969789 / 0.28698725
=1.0443

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)
=((1140 + 2422) / 9473) / ((1332 + 2474) / 9062)
=0.37601605 / 0.41999559
=0.8953

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
=(644 - 0 - 1479) / 9473
=-0.0881

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 -2.75 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 1.2621.22470.841.26011.23291.0160.99180.94080.81560.9392
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 2.06281.09181.12981.00370.89860.98450.99631.05041.07251.0495
LVGI 0.95560.95630.95010.95661.00990.95390.94420.91740.84880.8523
TATA -0.0684-0.0096-0.0653-0.0651-0.0742-0.0802-0.0803-0.0961-0.1065-0.0913
M-score -2.88-1.91-3.10-2.36-2.55-2.75-2.67-2.96-3.03-2.69

JetBlue Airways Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.98611.06810.85890.94040.90660.8610.99260.92631.22351.146
GMI 0.94080.90180.88080.83810.81560.83770.85560.89870.93920.9992
AQI 0.83330.91340.90570.88330.990.82070.85750.91190.95530.9228
SGI 1.06911.09111.08161.09271.1031.08651.07041.05061.03371.0171
DEPI 1.01021.04151.05261.03051.03041.030.98030.96620.96150.9538
SGAI 1.05041.02441.03381.04951.07251.09031.09011.0711.04951.0443
LVGI 0.91740.88070.90860.89310.84880.84650.86260.84880.85230.8953
TATA -0.0961-0.0995-0.0968-0.1055-0.1065-0.1002-0.0994-0.0882-0.0913-0.0881
M-score -2.96-2.85-3.06-3.05-3.03-3.12-3.00-2.97-2.69-2.75
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