Delta Air Lines Stock Beneish M Score

DAL Stock  USD 63.34  0.30  0.47%   
This module uses fundamental data of Delta Air to approximate the value of its Beneish M Score. Delta Air 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. Check out Delta Air Piotroski F Score and Delta Air Altman Z Score analysis.
  
At this time, Delta Air's Interest Debt Per Share is quite stable compared to the past year. Debt Equity Ratio is expected to rise to 3.17 this year, although the value of Long Term Debt Total will most likely fall to about 13.9 B. At this time, Delta Air's PB Ratio is quite stable compared to the past year. Free Cash Flow Per Share is expected to rise to 1.87 this year, although the value of Dividend Yield will most likely fall to 0.
At this time, it appears that Delta Air Lines is a possible manipulator. The earnings manipulation may begin if Delta Air'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 Delta Air 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 Delta Air'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.
-1.69
Beneish M Score - Possible Manipulator
Elasticity of Receivables

1.0

Focus
Asset Quality

2.08

Focus
Expense Coverage

1.82

Focus
Gross Margin Strengs

1.97

Focus
Accruals Factor

1.82

Focus
Depreciation Resistance

1.01

Focus
Net Sales Growth

1.05

Focus
Financial Leverage Condition

1.0

Focus

Delta Air 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 Delta Air'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
Net Receivables3.3 B3.1 B
Sufficiently Up
Slightly volatile
Total Revenue61 B58 B
Sufficiently Up
Slightly volatile
Total Assets77.3 B73.6 B
Sufficiently Up
Slightly volatile
Total Current Assets6.2 B10.3 B
Way Down
Slightly volatile
Non Current Assets Total66.5 B63.4 B
Sufficiently Up
Slightly volatile
Property Plant Equipment24.5 B46.2 B
Way Down
Slightly volatile
Depreciation And Amortization1.2 B2.3 B
Way Down
Slightly volatile
Selling General Administrative3.1 B1.6 B
Way Up
Very volatile
Total Current Liabilities27.7 B26.4 B
Sufficiently Up
Slightly volatile
Non Current Liabilities Total20.9 B36.1 B
Way Down
Slightly volatile
Net Debt25.8 B24.5 B
Sufficiently Up
Slightly volatile
Short Term Debt4.7 B4.5 B
Sufficiently Up
Very volatile
Long Term Debt12.9 B17.1 B
Way Down
Slightly volatile
Short Term Investments953.5 M1.1 B
Fairly Down
Slightly volatile
Long Term Investments3.6 B3.5 B
Sufficiently Up
Slightly volatile

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

About Delta Air 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.

Other Operating Expenses

55.15 Billion

At this time, Delta Air's Other Operating Expenses is quite stable compared to the past year.

Delta Air 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 Delta Air. 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.
201920202021202220232024 (projected)
Net Receivables2.9B1.4B2.4B3.2B3.1B3.3B
Total Revenue47.0B17.1B29.9B50.6B58.0B61.0B
Total Assets64.5B72.1B72.5B72.3B73.6B77.3B
Total Current Assets8.2B17.4B15.9B13.0B10.3B6.2B
Net Debt14.4B27.2B26.7B27.3B24.5B25.8B
Long Term Debt8.9B27.4B25.1B20.7B17.1B12.9B
Operating Income3.8B(12.5B)260M1.6B5.5B5.8B
Investments206M(5.8B)(897M)(6.9B)(7.3B)(7.0B)
Gross Profit Margin0.230.26(0.38)(0.005987)0.150.39

Delta Air ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Delta Air's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Delta Air's managers, analysts, and investors.
Environmental
Governance
Social

About Delta Air Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Delta Air Lines's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Delta Air using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Delta Air Lines 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.

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When determining whether Delta Air Lines is a strong investment it is important to analyze Delta Air's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Delta Air's future performance. For an informed investment choice regarding Delta Stock, refer to the following important reports:
Check out Delta Air Piotroski F Score and Delta Air Altman Z Score analysis.
You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Is Passenger Airlines space 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 Delta Air. If investors know Delta 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 Delta Air listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.145
Dividend Share
0.5
Earnings Share
7.21
Revenue Per Share
94.267
Quarterly Revenue Growth
0.012
The market value of Delta Air Lines is measured differently than its book value, which is the value of Delta that is recorded on the company's balance sheet. Investors also form their own opinion of Delta Air's value that differs from its market value or its book value, called intrinsic value, which is Delta Air'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 Delta Air's market value can be influenced by many factors that don't directly affect Delta Air'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 Delta Air's value and its price as these two are different measures arrived at by different means. Investors typically determine if Delta Air is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Delta Air'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.