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Paychex (Paychex) Beneish M-Score : -2.42 (As of Jul. 12, 2024)


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What is Paychex 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 -2.42 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

PAYX' s Beneish M-Score Range Over the Past 10 Years
Min: -2.7   Med: -2.42   Max: -1.67
Current: -2.42

During the past 13 years, the highest Beneish M-Score of Paychex was -1.67. The lowest was -2.70. And the median was -2.42.


Paychex Beneish M-Score Historical Data

The historical data trend for Paychex'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.

Paychex Beneish M-Score Chart

Paychex Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.70 -2.30 -2.35 -2.50 -2.42

Paychex Quarterly Data
Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24
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 -2.50 -2.63 -2.57 -2.54 -2.42

Competitive Comparison of Paychex's Beneish M-Score

For the Staffing & Employment Services subindustry, Paychex'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.


Paychex's Beneish M-Score Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Paychex's Beneish M-Score distribution charts can be found below:

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



Paychex 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 Paychex 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 * 1.081+0.528 * 0.9862+0.404 * 1.0604+0.892 * 1.0542+0.115 * 1.0017
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0134+4.679 * -0.019821-0.327 * 0.9388
=-2.41

* 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 (May24) TTM:Last Year (May23) TTM:
Total Receivables was $1,625 Mil.
Revenue was 1295.1 + 1439.3 + 1257.9 + 1286 = $5,278 Mil.
Gross Profit was 919.9 + 1059.5 + 893.8 + 925.8 = $3,799 Mil.
Total Current Assets was $7,252 Mil.
Total Assets was $10,383 Mil.
Property, Plant and Equipment(Net PPE) was $459 Mil.
Depreciation, Depletion and Amortization(DDA) was $177 Mil.
Selling, General, & Admin. Expense(SGA) was $1,625 Mil.
Total Current Liabilities was $5,309 Mil.
Long-Term Debt & Capital Lease Obligation was $848 Mil.
Net Income was 379.9 + 498.6 + 392.7 + 419.2 = $1,690 Mil.
Non Operating Income was -2.1 + 0 + -0.1 + 0.7 = $-2 Mil.
Cash Flow from Operations was 221.7 + 671.7 + 348.5 + 655.8 = $1,898 Mil.
Total Receivables was $1,426 Mil.
Revenue was 1229.6 + 1381 + 1190.3 + 1206.2 = $5,007 Mil.
Gross Profit was 859.8 + 1008.1 + 831 + 855.2 = $3,554 Mil.
Total Current Assets was $7,528 Mil.
Total Assets was $10,546 Mil.
Property, Plant and Equipment(Net PPE) was $458 Mil.
Depreciation, Depletion and Amortization(DDA) was $177 Mil.
Selling, General, & Admin. Expense(SGA) was $1,521 Mil.
Total Current Liabilities was $5,805 Mil.
Long-Term Debt & Capital Lease Obligation was $856 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)
=(1625.3 / 5278.3) / (1426.2 / 5007.1)
=0.307921 / 0.284836
=1.081

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)
=(3554.1 / 5007.1) / (3799 / 5278.3)
=0.709812 / 0.719739
=0.9862

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 - (7251.5 + 458.6) / 10383.1) / (1 - (7528.1 + 457.8) / 10546.4)
=0.257438 / 0.242784
=1.0604

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
=5278.3 / 5007.1
=1.0542

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))
=(176.6 / (176.6 + 457.8)) / (176.5 / (176.5 + 458.6))
=0.278373 / 0.277909
=1.0017

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)
=(1624.9 / 5278.3) / (1521 / 5007.1)
=0.307845 / 0.303769
=1.0134

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)
=((847.6 + 5309.1) / 10383.1) / ((855.5 + 5805.4) / 10546.4)
=0.592954 / 0.63158
=0.9388

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
=(1690.4 - -1.5 - 1897.7) / 10383.1
=-0.019821

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.

Paychex has a M-score of -2.41 suggests that the company is unlikely to be a manipulator.


Paychex Beneish M-Score Related Terms

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Paychex (Paychex) Business Description

Traded in Other Exchanges
Address
911 Panorama Trail South, Rochester, NY, USA, 14625-2396
Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, established in 1979, services over 740,000 clients and pays over 1 in 12 U.S. private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Executives
Flaschen David J S director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Christopher C Simmons officer: VP, Controller & Treasurer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Michael E Gioja officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Efrain Rivera officer: Sr. Vice President, CFO 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Martin Mucci officer: Sr. Vice President 911 PANORAMA TRAIL S, ROCHESTER NY 14625
Joseph M Tucci director EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Joseph M Velli director
Elizabeth Roaldsen officer: Sr. Vice President 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Karen E. Saunders-mcclendon officer: VP, Chief Human Resources Offi 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Theresa M. Payton director 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
John B Gibson officer: Sr. VP, Service CONVERGYS CORPORATION, 201 EAST FOURTH STREET, CINCINNATI OH 45202
Mark Anthony Bottini officer: Sr. VP of Sales 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Robert L. Schrader officer: VP/Controller 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Stephanie L Schaeffer officer: Chief Legal Officer 911 PANORAMA TRAIL SOUTH, ROCHESTER NY 14625
Joseph Doody director CASELLA WASTE SYSTEMS INC, 25 GREENS HILL LANE PO BOX 866, RUTLAND VT 05701

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