Paychex Beneish M Score

PAYX
 Stock
  

USD 125.90  1.87  1.51%   

This module uses fundamental data of Paychex to approximate the value of its Beneish M Score. Paychex 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 check Paychex Piotroski F Score and Paychex Altman Z Score analysis.
  
Paychex Long Term Debt to Equity is fairly stable at the moment as compared to the past year. Paychex reported Long Term Debt to Equity of 0.26 in 2021. Debt to Equity Ratio is likely to rise to 0.30 in 2022, whereas Total Debt is likely to drop slightly above 724.2 M in 2022. Paychex Earnings per Basic Share are fairly stable at the moment as compared to the past year. Paychex reported Earnings per Basic Share of 3.86 in 2021. Earnings per Diluted Share is likely to rise to 4.14 in 2022, whereas PPandE Turnover is likely to drop 9.70 in 2022.
At this time, it appears that Paychex is an unlikely manipulator. The earnings manipulation may begin if Paychex'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 Paychex 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 Paychex'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.
-2.29
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.34Focus
Asset Quality0.9Focus
Expense Coverage1.09Focus
Gross Margin Strengs0.94Focus
Accruals Factor1.09Focus
Depreciation Resistance1.09Focus
Net Sales Growth0.81Focus
Financial Leverage Condition1.03Focus

Paychex 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 Paychex'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
Selling General and Administrative Expense1.2 B1.4 B
Fairly Down
Increasing
Slightly volatile
Revenues3.7 B4.6 B
Significantly Down
Increasing
Slightly volatile
Trade and Non Trade ReceivablesB950.8 M
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net446.3 M470 M
Notably Down
Increasing
Slightly volatile
Operating Income1.5 B1.8 B
Significantly Down
Increasing
Slightly volatile
Net Cash Flow from Operations1.2 B1.5 B
Significantly Down
Increasing
Slightly volatile
Liabilities Non Current1.5 B1.4 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities4.7 B5.3 B
Fairly Down
Increasing
Slightly volatile
Total Liabilities5.6 B6.5 B
Fairly Down
Increasing
Slightly volatile
Investments Non Current15.4 M15 M
Fairly Up
Decreasing
Slightly volatile
Investments Current36 M35.1 M
Fairly Up
Decreasing
Slightly volatile
Investments51.4 M50.1 M
Fairly Up
Decreasing
Slightly volatile
Gross Margin66.4870.59
Notably Down
Decreasing
Slightly volatile
Depreciation Amortization and Accretion176.1 M208.7 M
Fairly Down
Increasing
Slightly volatile
Debt Non Current724.2 M728.5 M
Slightly Down
Decreasing
Slightly volatile
Total Debt724.2 M728.5 M
Slightly Down
Decreasing
Slightly volatile
Assets Non Current2.7 B3.4 B
Significantly Down
Increasing
Slightly volatile
Current Assets5.7 B6.6 B
Fairly Down
Increasing
Slightly volatile
Total Assets8.1 B9.6 B
Fairly Down
Increasing
Slightly volatile

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

About Paychex 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

176.1 Million

Paychex Depreciation Amortization and Accretion is fairly stable at the moment as compared to the past year. Paychex reported Depreciation Amortization and Accretion of 208.72 Million in 2021

Paychex 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 Paychex. 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)
Revenues3.38 B3.77 B4.04 B4.06 B4.61 B3.72 B
Total Assets7.46 B8.68 B8.55 B9.23 B9.64 B8.08 B
Current Assets5.78 B5.68 B5.46 B6.17 B6.58 B5.67 B
Assets Non Current1.58 B1.56 B2.02 B3 B3.45 B2.73 B
Total Liabilities5.44 B6.06 B5.77 B6.28 B6.55 B5.58 B
Current Liabilities5.29 B4.84 B4.43 B4.94 B5.27 B4.7 B
Operating Income1.29 B1.37 B1.46 B1.46 B1.84 B1.46 B
Investments661.7 M592.8 M361.5 M55.7 M50.13 M51.45 M
Investments Current220.6 M138.8 M66 M39 M35.1 M36.02 M

About Paychex Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Paychex's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Paychex using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Paychex 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.
Paychex, Inc. provides integrated human capital management solutions for human resources , payroll, benefits, and insurance services for small to medium-sized businesses in the United States, Europe, and India. The company was founded in 1971 and is headquartered in Rochester, New York. Paychex operates under Staffing Employment Services classification in the United States and is traded on NASDAQ Exchange. It employs 16000 people.

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Please check Paychex Piotroski F Score and Paychex Altman Z Score analysis. You can also try Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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