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eBay earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score49 / 100 · grade D · rank 891 of 1027

eBay (EBAY) scores 49 of 100 for earnings quality, grade D: rank 891 of 1027 companies and 227 of 287 in industrials. It loses the most points on accruals of +0.4% of assets, higher than 88% of companies, adjusted earnings 28% below GAAP, Montier C-score 3 of 5 checks failed. It earns full or near-full marks for profit about as variable as cash flow (smoothness 21.49).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of +0.4% of assets, higher than 88% of companies220
Beneish M-scoreBeneish M-score -2.12: in the grey zone1215
Dechow F-scoreDechow F-score 1.44 (above normal)1015
Montier C-scoreMontier C-score 3 of 5 checks failed615
Discretionary accrualsdiscretionary accruals of +2.3% of assets (modified Jones), smaller than most610
Piotroski F-scorePiotroski F-score 6 of 9710
Non-GAAP gapadjusted earnings 28% below GAAP110
Earnings smoothnessprofit about as variable as cash flow (smoothness 21.49)55
EBAY: share of the available points, by componentEBAY: share of the available points, by componentAccruals11%Discretionary accruals63%Beneish M-score79%Dechow F-score69%Montier C-score40%Piotroski F-score67%Non-GAAP gap8%Earnings smoothness100%

How the score is built

Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.

Every company ranked → The full quality workbench, live → eBay: cash flow →

Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.