Switch to:

Netflix Beneish M-Score

: -1.49 (As of Today)
View and export this data going back to 2002. Start your Free Trial

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.

Netflix has a M-score of -1.49 signals that the company is a manipulator.

NAS:NFLX' s Beneish M-Score Range Over the Past 10 Years
Min: -4.51   Max: -1.42
Current: -1.49

-4.51
-1.42

During the past 13 years, the highest Beneish M-Score of Netflix was -1.42. The lowest was -4.51. And the median was -2.27.


Netflix Beneish M-Score Historical Data

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

* Premium members only.

Netflix Annual Data
Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.15 -1.93 -1.47 -1.66 -1.54

Netflix Quarterly Data
Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19
Beneish M-Score 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 Premium Member Only Premium Member Only Premium Member Only -1.59 -1.54 -1.42 -1.50 -1.49

Competitive Comparison
* 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.


Netflix Beneish M-Score Distribution

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



Netflix 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 Netflix 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+0.528 * 0.9826+0.404 * 1.3304+0.892 * 1.2674+0.115 * 1.0037
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9354+4.679 * 0.1317-0.327 * 1.0157
=-1.49

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

This Year (Sep19) TTM:Last Year (Sep18) TTM:
Accounts Receivable was $0 Mil.
Revenue was 5244.905 + 4923.116 + 4520.992 + 4186.841 = $18,876 Mil.
Gross Profit was 2146.986 + 1917.459 + 1650.378 + 1117.591 = $6,832 Mil.
Total Current Assets was $5,328 Mil.
Total Assets was $30,942 Mil.
Property, Plant and Equipment(Net PPE) was $482 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,821 Mil.
Selling, General, & Admin. Expense(SGA) was $3,058 Mil.
Total Current Liabilities was $7,258 Mil.
Long-Term Debt & Capital Lease Obligation was $12,426 Mil.
Net Income was 665.244 + 270.65 + 344.052 + 133.934 = $1,414 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -501.794 + -543.754 + -379.799 + -1235.072 = $-2,660 Mil.
Accounts Receivable was $0 Mil.
Revenue was 3999.374 + 3907.27 + 3700.856 + 3285.755 = $14,893 Mil.
Gross Profit was 1587.028 + 1504.839 + 1400.277 + 805.067 = $5,297 Mil.
Total Current Assets was $8,730 Mil.
Total Assets was $23,366 Mil.
Property, Plant and Equipment(Net PPE) was $371 Mil.
(DDA) was $7,316 Mil.
Selling, General, & Admin. Expense(SGA) was $2,580 Mil.
Total Current Liabilities was $6,298 Mil.
Long-Term Debt & Capital Lease Obligation was $8,337 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(0 / 18875.854) / (0 / 14893.255)
=0 / 0
=1

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)
=(5297.211 / 14893.255) / (6832.414 / 18875.854)
=0.35567853 / 0.36196582
=0.9826

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 - (5327.758 + 481.992) / 30941.711) / (1 - (8729.981 + 371.152) / 23366.229)
=0.81223566 / 0.61050056
=1.3304

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
=18875.854 / 14893.255
=1.2674

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))
=(7315.838 / (7315.838 + 371.152)) / (8821.002 / (8821.002 + 481.992))
=0.95171686 / 0.94818958
=1.0037

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(3058.287 / 18875.854) / (2579.735 / 14893.255)
=0.16202112 / 0.17321499
=0.9354

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)
=((12425.746 + 7257.9) / 30941.711) / ((8336.586 + 6298.24) / 23366.229)
=0.63615247 / 0.62632383
=1.0157

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
=(1413.88 - 0 - -2660.419) / 30941.711
=0.1317

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.

Netflix has a M-score of -1.49 signals that the company is likely to be a manipulator.


Netflix Beneish M-Score Headlines

From the Internet

Why Netflix Stock Fell on Friday

- Fool 2019-10-18 19:10:00

Stock Market News for Oct 18, 2019

- Zacks 2019-10-18 09:42:00

What Happened in the Stock Market Today

- Fool 2019-10-17 16:57:00

Why Isn't Netflix Stock Crashing Today?

- Fool 2019-10-17 11:47:00

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)