GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » JD.com Inc (MEX:JD) » Definitions » Beneish M-Score

JD.com (MEX:JD) Beneish M-Score : -2.54 (As of Dec. 15, 2024)


View and export this data going back to 2015. Start your Free Trial

What is JD.com Beneish M-Score?

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 -2.54 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MEX:JD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.36   Med: -2.6   Max: 2.97
Current: -2.54

During the past 13 years, the highest Beneish M-Score of JD.com was 2.97. The lowest was -3.36. And the median was -2.60.


JD.com Beneish M-Score Historical Data

The historical data trend for JD.com'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.

JD.com Beneish M-Score Chart

JD.com Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.99 -2.47 -2.60 -2.46 -2.71

JD.com Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.74 -2.71 -2.74 -2.65 -2.54

Competitive Comparison of JD.com's Beneish M-Score

For the Internet Retail subindustry, JD.com'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.


JD.com's Beneish M-Score Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, JD.com's Beneish M-Score distribution charts can be found below:

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



JD.com 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 JD.com 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 * 1.036+0.528 * 0.9364+0.404 * 1.3075+0.892 * 1.0165+0.115 * 1.3323
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0155+4.679 * -0.017579-0.327 * 1.0389
=-2.40

* 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.

This Year (Sep24) TTM:Last Year (Sep23) TTM:
Total Receivables was MXN63,682 Mil.
Revenue was 724575.77 + 735857.176 + 599297.301 + 727630.445 = MXN2,787,361 Mil.
Gross Profit was 125340.614 + 116006.023 + 91652.164 + 103416.394 = MXN436,415 Mil.
Total Current Assets was MXN865,700 Mil.
Total Assets was MXN1,790,824 Mil.
Property, Plant and Equipment(Net PPE) was MXN315,988 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN5,109 Mil.
Selling, General, & Admin. Expense(SGA) was MXN132,345 Mil.
Total Current Liabilities was MXN738,951 Mil.
Long-Term Debt & Capital Lease Obligation was MXN196,566 Mil.
Net Income was 32643.712 + 31929.56 + 16431.479 + 8056.599 = MXN89,061 Mil.
Non Operating Income was 10796.829 + 14654.163 + -2306.86 + -33973.695 = MXN-10,830 Mil.
Cash Flow from Operations was -17305.536 + 128127.336 + -26076.043 + 46625.574 = MXN131,371 Mil.
Total Receivables was MXN60,475 Mil.
Revenue was 591214.726 + 689287.049 + 635516.681 + 826199.523 = MXN2,742,218 Mil.
Gross Profit was 92492.317 + 99187.758 + 94214.754 + 116156.081 = MXN402,051 Mil.
Total Current Assets was MXN853,552 Mil.
Total Assets was MXN1,473,616 Mil.
Property, Plant and Equipment(Net PPE) was MXN236,710 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN5,127 Mil.
Selling, General, & Admin. Expense(SGA) was MXN128,211 Mil.
Total Current Liabilities was MXN626,397 Mil.
Long-Term Debt & Capital Lease Obligation was MXN114,618 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)
=(63681.814 / 2787360.692) / (60475.286 / 2742217.979)
=0.022847 / 0.022053
=1.036

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)
=(402050.91 / 2742217.979) / (436415.195 / 2787360.692)
=0.146615 / 0.156569
=0.9364

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 - (865699.79 + 315988.131) / 1790823.88) / (1 - (853551.97 + 236709.776) / 1473616.393)
=0.340143 / 0.260145
=1.3075

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
=2787360.692 / 2742217.979
=1.0165

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))
=(5126.906 / (5126.906 + 236709.776)) / (5109.199 / (5109.199 + 315988.131))
=0.0212 / 0.015912
=1.3323

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)
=(132345.012 / 2787360.692) / (128211.03 / 2742217.979)
=0.04748 / 0.046754
=1.0155

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)
=((196566.295 + 738951.136) / 1790823.88) / ((114618.295 + 626396.702) / 1473616.393)
=0.522395 / 0.502855
=1.0389

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
=(89061.35 - -10829.563 - 131371.331) / 1790823.88
=-0.017579

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.

JD.com has a M-score of -2.40 suggests that the company is unlikely to be a manipulator.


JD.com Business Description

Address
No. 18 Kechuang 11 Street, 20th Floor, Building A, Yizhuang Economic & Technological Development Zone, Daxing District, Beijing, CHN, 101111
JD.com is a leading e-commerce platform with its 2022 China GMV being similar to Pinduoduo (GMV not reported), on our estimate, but still lower than Alibaba. it offers a wide selection of authentic products with speedy and reliable delivery. The company has built its own nationwide fulfilment infrastructure and last-mile delivery network, staffed by its own employees, which supports both its online direct sales, its online marketplace and omnichannel businesses.