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PayPal Holdings Beneish M-Score

: -2.50 (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 -2.5 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:

PYPL' s Beneish M-Score Range Over the Past 10 Years
Min: -2.85   Med: -2.47   Max: -2.18
Current: -2.5

During the past 10 years, the highest Beneish M-Score of PayPal Holdings was -2.18. The lowest was -2.85. And the median was -2.47.


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 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.34 -2.79 -2.45 -2.39 -2.43

PayPal Holdings Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
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 -2.43 -2.44 -2.43 -2.41 -2.50

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:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9992+0.528 * 1.1039+0.404 * 1.0494+0.892 * 1.1066+0.115 * 0.9514
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9431+4.679 * -0.038-0.327 * 1.0446
=-2.50

* 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 (Jun22) TTM:Last Year (Jun21) TTM:
Total Receivables was $43,837 Mil.
Revenue was 6806 + 6483 + 6918 + 6182 = $26,389 Mil.
Gross Profit was 3314 + 3297 + 3616 + 3350 = $13,577 Mil.
Total Current Assets was $55,252 Mil.
Total Assets was $77,810 Mil.
Property, Plant and Equipment(Net PPE) was $1,832 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,310 Mil.
Selling, General, & Admin. Expense(SGA) was $6,699 Mil.
Total Current Liabilities was $45,095 Mil.
Long-Term Debt & Capital Lease Obligation was $10,198 Mil.
Net Income was -341 + 509 + 801 + 1087 = $2,056 Mil.
Non Operating Income was -763 + -74 + -301 + 164 = $-974 Mil.
Cash Flow from Operations was 1466 + 1242 + 1763 + 1513 = $5,984 Mil.
Total Receivables was $39,646 Mil.
Revenue was 6238 + 6033 + 6116 + 5459 = $23,846 Mil.
Gross Profit was 3545 + 3485 + 3420 + 3093 = $13,543 Mil.
Total Current Assets was $53,231 Mil.
Total Assets was $73,816 Mil.
Property, Plant and Equipment(Net PPE) was $1,848 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,215 Mil.
Selling, General, & Admin. Expense(SGA) was $6,419 Mil.
Total Current Liabilities was $41,268 Mil.
Long-Term Debt & Capital Lease Obligation was $8,945 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)
=(43837 / 26389) / (39646 / 23846)
=1.66118458 / 1.66258492
=0.9992

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)
=(13543 / 23846) / (13577 / 26389)
=0.56793592 / 0.51449468
=1.1039

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 - (55252 + 1832) / 77810) / (1 - (53231 + 1848) / 73816)
=0.26636679 / 0.25383386
=1.0494

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
=26389 / 23846
=1.1066

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))
=(1215 / (1215 + 1848)) / (1310 / (1310 + 1832))
=0.39666993 / 0.41693189
=0.9514

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)
=(6699 / 26389) / (6419 / 23846)
=0.25385577 / 0.26918561
=0.9431

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)
=((10198 + 45095) / 77810) / ((8945 + 41268) / 73816)
=0.7106156 / 0.68024548
=1.0446

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
=(2056 - -974 - 5984) / 77810
=-0.038

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 -2.50 suggests that the company is unlikely to be a manipulator.


PayPal Holdings Beneish M-Score Related Terms

Thank you for viewing the detailed overview of PayPal Holdings's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


PayPal Holdings Business Description

PayPal Holdings logo
Address
2211 North First Street, San Jose, CA, USA, 95131
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 426 million active accounts at the end of 2021, including 34 million merchant accounts. The company also owns Xoom, an international money transfer business, and Venmo, a person-to-person payment platform.
Executives
Scheibe Gabrielle officer: SVP, Corp Finance & Investor R 2211 NORTH FIRST STREET SAN JOSE CA 95131
Lores Enrique director 3000 HANOVER STREET PALO ALTO CA 94304
Karbowski Jeffrey William officer: VP, Chief Accounting Officer 2211 N 1ST ST SAN JOSE CA 95131
Alford Peggy officer: EVP, Global Sales 435 TASSO STREET PALO ALTO CA 94301
Rainey John D officer: CFO and EVP, Global Cust Oper C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Johnson Allison officer: EVP, Chief Marketing Officer C/O PAYPAL HOLDINGS INC 2211 NORTH FIRST STREET SAN JOSE CA 95131
Britto Mark officer: EVP, Global Sales and Credit C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Messemer Deborah M. director C/O ALLOGENE THERAPEUTICS, INC. 210 EAST GRAND AVENUE SOUTH SAN FRANCISCO CA 94080
Adkins Rodney C director 55 GLENLAKE PARKWAY, NE ATLANTA GA 30328
Sarnoff Ann director C/O HSN, INC. 1 HSN DRIVE SAINT PETERSBURG FL 33729
Karczmer Aaron officer: SVP, CR & Compliance Officer PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Johnson Belinda J. director 394 PACIFIC AVENUE, FLOOR 2 SAN FRANCISCO CA 94111
Shivananda Sripada officer: SVP, Chief Technology Officer 2211 NORTH FIRST STREET 2211 NORTH FIRST STREET SAN JOSE CA 95131
Casares Wences director C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Morales-jaffe Marcia officer: SVP, Human Resources C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131

PayPal Holdings Headlines

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