JP Morgan Beneish M Score

JPM -  USA Stock  

USD 151.45  0.20  0.13%

This module uses fundamental data of JP Morgan to approximate the value of its Beneish M Score. JP Morgan 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 see JP Morgan Piotroski F Score and JP Morgan Altman Z Score analysis.

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JP Morgan Long Term Debt is relatively stable at the moment as compared to the past year. The company's current value of Long Term Debt is estimated at 308.35 Billion. Issuance Repayment of Debt Securities is expected to hike to about 10.4 B this year, although the value of Total Debt will most likely fall to nearly 510.8 B. JP Morgan EBITDA Margin is relatively stable at the moment as compared to the past year. The company's current value of EBITDA Margin is estimated at 0.40. Enterprise Value over EBIT is expected to hike to 14.34 this year, although the value of Total Assets Per Share will most likely fall to 889.16.
At this time, it appears that JP Morgan Chase is an unlikely manipulator. The earnings manipulation may begin if JP Morgan'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 JP Morgan 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 JP Morgan'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.
-2.75
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables
0.93
Asset Quality
N/A
Expense Coverage
1.0
Gross Margin Strengs
0.99
Accruals Factor
1.0
Depreciation Resistance
0.96
Net Sales Growth
1.02
Financial Leverage Condition
0.99

JP Morgan 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 JP Morgan'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
Revenues122.1 B119.5 B
Fairly Up
Increasing
Slightly volatile
Selling General and Administrative Expense62.3 B60.7 B
Fairly Up
Increasing
Slightly volatile
Net Cash Flow from Operations(82 B)(79.9 B)
Fairly Down
Decreasing
Slightly volatile
Depreciation Amortization and AccretionB8.6 B
Significantly Down
Increasing
Slightly volatile
Total Assets3244.7 B3384.8 B
Sufficiently Down
Increasing
Slightly volatile
Investments2476.1 B2534.6 B
Fairly Down
Increasing
Slightly volatile
Property Plant and Equipment Net23.9 B27.1 B
Fairly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables86.1 B90.5 B
Notably Down
Increasing
Slightly volatile
Total Liabilities2962.9 B3105.4 B
Sufficiently Down
Increasing
Slightly volatile
Total Debt510.8 B542.1 B
Notably Down
Decreasing
Slightly volatile
Operating Income50.6 B52.9 B
Sufficiently Down
Increasing
Slightly volatile
Gross Margin0.890.9
Fairly Down
Decreasing
Slightly volatile

JP Morgan Chase 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 JP Morgan's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards JP Morgan in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find JP Morgan's degree of accounting gimmicks and manipulations.

About JP Morgan 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.

Operating Expenses

71.44 BillionShare
JP Morgan Operating Expenses is relatively stable at the moment as compared to the past year. The company's current value of Operating Expenses is estimated at 71.44 Billion

JP Morgan 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 JP Morgan. 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.
201620172018201920202021 (projected)
Trade and Non Trade Receivables52.33 B67.73 B73.2 B72.86 B90.5 B86.11 B
Revenues96.57 B100.7 B108.78 B115.4 B119.54 B122.07 B
Total Assets2,490.97 B2,533.6 B2,622.53 B2,687.38 B3,384.76 B3,244.68 B
Property Plant and Equipment Net14.13 B14.16 B14.93 B25.81 B27.11 B23.87 B
Depreciation Amortization and Accretion5.48 B6.18 B7.79 B8.37 B8.61 B8.04 B
Selling General and Administrative Expense51.12 B53.44 B57.42 B60.18 B60.72 B62.29 B
Total Liabilities2,236.78 B2,277.91 B2,366.02 B2,426.05 B3,105.4 B2,962.85 B
Total Debt495.35 B494.8 B533.63 B516.09 B542.1 B510.84 B
Operating Income39.9 B41.19 B45.63 B50.13 B52.89 B50.63 B
Net Cash Flow from Operations21.88 B(10.83 B)15.61 B4.09 B(79.91 B)(82.01 B)
Investments1,868.55 B1,852.43 B2,080.23 B2,271.73 B2,534.57 B2,476.1 B

About JP Morgan Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze JP Morgan Chase's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of JP Morgan using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of JP Morgan Chase 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.
JPMorgan Chase Co. operates as a financial services company worldwide. JPMorgan Chase Co. was founded in 1799 and is headquartered in New York, New York. JP Morgan operates under BanksDiversified classification in the United States and is traded on New York Stock Exchange. It employs 259350 people.

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Please see JP Morgan Piotroski F Score and JP Morgan Altman Z Score analysis. Note that the JP Morgan Chase information on this page should be used as a complementary analysis to other JP Morgan'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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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The market value of JP Morgan Chase is measured differently than its book value, which is the value of JP Morgan that is recorded on the company's balance sheet. Investors also form their own opinion of JP Morgan's value that differs from its market value or its book value, called intrinsic value, which is JP Morgan'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 JP Morgan's market value can be influenced by many factors that don't directly affect JP Morgan Chase underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between JP Morgan's value and its price as these two are different measures arrived at by different means. Investors typically determine JP Morgan value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, JP Morgan'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.