Carvana Beneish M Score

CVNA -  USA Stock  

USD 135.65  22.34  14.14%

This module uses fundamental data of Carvana Co to approximate the value of its Beneish M Score. Carvana Co 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. Continue to Carvana Co Piotroski F Score and Carvana Co Altman Z Score analysis.

Carvana Beneish M Score 

 
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The current year Total Debt is expected to grow to about 2.3 B. The current year Debt Current is expected to grow to about 123.9 M. Carvana Co Long Term Debt to Equity is projected to increase based on the last few years of reporting. The past year's Long Term Debt to Equity was at 5.21. The current year PPandE Turnover is expected to grow to 10.41, whereas Inventory Turnover is forecasted to decline to 4.30.
At this time, it appears that Carvana Co Cl is a possible manipulator. The earnings manipulation may begin if Carvana Co'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 Carvana Co 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 Carvana Co'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.
-2.06
Beneish M Score - Possible Manipulator
Elasticity of Receivables
1.0
Asset Quality
1.0
Expense Coverage
1.0
Gross Margin Strengs
1.06
Accruals Factor
1.0
Depreciation Resistance
1.0
Net Sales Growth
1.08
Financial Leverage Condition
1.0

Carvana Co 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 Carvana Co'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
Revenues6.9 B6.4 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative Expense1.4 B1.3 B
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion91.6 M84.9 M
Significantly Up
Increasing
Slightly volatile
Total Assets3.8 B3.5 B
Significantly Up
Increasing
Slightly volatile
Investments503.8 M466.9 M
Significantly Up
Increasing
Slightly volatile
Investments Current503.8 M466.9 M
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net1.3 B1.2 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables98 M90.8 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities2.8 B2.6 B
Significantly Up
Increasing
Slightly volatile
Current Assets2.4 B2.2 B
Significantly Up
Increasing
Slightly volatile
Assets Non Current1.4 B1.3 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities498.3 M537 M
Significantly Down
Increasing
Slightly volatile
Liabilities Non Current2.2 BB
Significantly Up
Increasing
Slightly volatile
Total Debt2.3 B2.2 B
Significantly Up
Increasing
Slightly volatile
Debt Current123.9 M120.8 M
Fairly Up
Increasing
Slightly volatile
Debt Non Current2.2 BB
Significantly Up
Increasing
Slightly volatile
Gross Margin0.170.16
Notably Up
Increasing
Slightly volatile

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

About Carvana Co 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

91.56 MillionShare
Carvana Co Depreciation Amortization and Accretion is projected to increase significantly based on the last few years of reporting. The past year's Depreciation Amortization and Accretion was at 84.86 Million

Carvana Co 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 Carvana Co. 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)
Revenues858.87 M1.96 B3.94 B5.59 B6.42 B6.93 B
Total Assets641.14 M991.01 M2.06 B3.04 B3.49 B3.77 B
Current Assets489.72 M662.85 M1.36 B1.92 B2.21 B2.39 B
Assets Non Current151.42 M328.16 M698.33 M1.11 B1.28 B1.38 B
Total Liabilities361.59 M763.59 M1.87 B2.23 B2.57 B2.77 B
Current Liabilities306.03 M329.51 M864.87 M467 M537.05 M498.28 M
Total Debt302.39 M633.45 M1.62 B1.87 B2.15 B2.32 B
Debt Current253.92 M208.1 M617.57 M105 M120.75 M123.93 M
Debt Non Current48.47 M425.35 M999.13 M1.76 B2.03 B2.19 B
Operating Income(155.31 M)(228.55 M)(280.3 M)(332.4 M)(299.16 M)(307.03 M)
Investments45.56 M105.2 M385.75 M406 M466.9 M503.76 M
Investments Current45.56 M105.2 M385.75 M406 M466.9 M503.76 M
Gross Margin0.0790.10.130.140.160.17

About Carvana Co Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Carvana Co Cl's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Carvana Co using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Carvana Co Cl 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.
Carvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. The company was founded in 2012 and is headquartered in Tempe, Arizona. Carvana Co operates under Internet Retail classification in the United States and is traded on New York Stock Exchange. It employs 10400 people.

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Pair Trading with Carvana Co

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 Carvana Co 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 Carvana Co will appreciate offsetting losses from the drop in the long position's value.

Carvana Co Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for Carvana Co and EBay Inc. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
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Continue to Carvana Co Piotroski F Score and Carvana Co Altman Z Score analysis. Note that the Carvana Co Cl information on this page should be used as a complementary analysis to other Carvana Co'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 Shere Portfolio module to track or share privately all of your investments from the convenience of any device.

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Is Carvana Co'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 Carvana Co. If investors know Carvana 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 Carvana Co 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 Carvana Co Cl is measured differently than its book value, which is the value of Carvana that is recorded on the company's balance sheet. Investors also form their own opinion of Carvana Co's value that differs from its market value or its book value, called intrinsic value, which is Carvana Co'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 Carvana Co's market value can be influenced by many factors that don't directly affect Carvana Co'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 Carvana Co's value and its price as these two are different measures arrived at by different means. Investors typically determine Carvana Co value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Carvana Co'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.