Amazon Beneish M Score

AMZN -  USA Stock  

USD 2,152  5.44  0.25%

This module uses fundamental data of Amazon to approximate the value of its Beneish M Score. Amazon M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please continue to Amazon Piotroski F Score and Amazon Altman Z Score analysis.
  
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Total Debt is expected to rise to about 125.6 B this year. Debt Non Current is expected to rise to about 125.6 B this year. Amazon Operating Margin is quite stable at the moment as compared to the past year. The company's current value of Operating Margin is estimated at 5.71. Cash Flow Per Share is expected to rise to 98.20 this year, although the value of Inventory Turnover will most likely fall to 8.75.
At this time, it appears that Amazon Inc is an unlikely manipulator. The earnings manipulation may begin if Amazon's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Amazon executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Amazon's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.52
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset Quality1.0Focus
Expense Coverage1.0Focus
Gross Margin Strengs1.0Focus
Accruals Factor1.0Focus
Depreciation Resistance1.0Focus
Net Sales Growth1.08Focus
Financial Leverage Condition1.0Focus

Amazon Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Amazon's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues506.9 B469.8 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative Expense44.6 B41.4 B
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations37.5 B46.3 B
Significantly Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion37 B34.3 B
Significantly Up
Increasing
Slightly volatile
Total Assets453.8 B420.5 B
Significantly Up
Increasing
Slightly volatile
Investments64.6 B59.8 B
Significantly Up
Increasing
Slightly volatile
Investments Current64.6 B59.8 B
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net233.4 B216.4 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables35.5 B32.9 B
Significantly Up
Increasing
Slightly volatile
Total Liabilities304.6 B282.3 B
Significantly Up
Increasing
Slightly volatile
Current Assets174.3 B161.6 B
Significantly Up
Increasing
Slightly volatile
Assets Non Current279.4 B259 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities153.5 B142.3 B
Significantly Up
Increasing
Slightly volatile
Liabilities Non Current151.1 B140 B
Significantly Up
Increasing
Slightly volatile
Total Debt125.6 B116.4 B
Significantly Up
Increasing
Slightly volatile
Debt Non Current125.6 B116.4 B
Significantly Up
Increasing
Slightly volatile
Operating Income26.8 B24.9 B
Significantly Up
Increasing
Slightly volatile
Gross Margin0.420.42
Steady
Increasing
Slightly volatile

Amazon Inc Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Amazon's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Amazon in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Amazon's degree of accounting gimmicks and manipulations.

About Amazon Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

37 Billion

Share
Amazon Depreciation Amortization and Accretion is quite stable at the moment as compared to the past year. The company's current value of Depreciation Amortization and Accretion is estimated at 37 Billion

Amazon Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Amazon. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues177.87 B232.89 B280.52 B386.06 B469.82 B506.91 B
Total Assets131.31 B162.65 B225.25 B321.19 B420.55 B453.75 B
Current Assets60.2 B75.1 B96.33 B132.73 B161.58 B174.34 B
Assets Non Current71.11 B87.55 B128.91 B188.46 B258.97 B279.41 B
Total Liabilities103.6 B119.1 B163.19 B227.79 B282.3 B304.59 B
Current Liabilities57.88 B68.39 B87.81 B126.39 B142.27 B153.5 B
Total Debt24.74 B33.15 B63.2 B84.39 B116.39 B125.58 B
Debt Non Current24.74 B33.15 B63.2 B84.39 B116.39 B125.58 B
Operating Income4.11 B12.42 B14.54 B22.9 B24.88 B26.84 B
Investments10.46 B9.5 B18.93 B42.27 B59.83 B64.55 B
Investments Current10.46 B9.5 B18.93 B42.27 B59.83 B64.55 B
Gross Margin0.330.350.370.40.410.42

About Amazon Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Amazon Inc's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Amazon using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Amazon Inc based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. Amazon.com, Inc. was incorporated in 1994 and is headquartered in Seattle, Washington. Amazon operates under Internet Retail classification in the United States and is traded on NASDAQ Exchange. It employs 1622000 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Amazon without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Amazon

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Amazon position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amazon will appreciate offsetting losses from the drop in the long position's value.

Amazon Pair Correlation

Correlation Analysis For Direct Indexing and Tax-loss Harvesting

The ability to find closely correlated positions to Amazon could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Amazon when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Amazon - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Amazon Inc to buy it.
The correlation of Amazon is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Amazon moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Amazon Inc moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Amazon can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Please continue to Amazon Piotroski F Score and Amazon Altman Z Score analysis. Note that the Amazon Inc information on this page should be used as a complementary analysis to other Amazon's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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When running Amazon Inc price analysis, check to measure Amazon's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Amazon is operating at the current time. Most of Amazon's value examination focuses on studying past and present price action to predict the probability of Amazon's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Amazon's price. Additionally, you may evaluate how the addition of Amazon to your portfolios can decrease your overall portfolio volatility.
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Is Amazon's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Amazon. If investors know Amazon will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Amazon listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Amazon Inc is measured differently than its book value, which is the value of Amazon that is recorded on the company's balance sheet. Investors also form their own opinion of Amazon's value that differs from its market value or its book value, called intrinsic value, which is Amazon's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Amazon's market value can be influenced by many factors that don't directly affect Amazon's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Amazon's value and its price as these two are different measures arrived at by different means. Investors typically determine Amazon value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Amazon's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.