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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.72 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Best Buy Co Inc has a M-score of -2.72 suggests that the company is not a manipulator.

BBY' s Beneish M-Score Range Over the Past 10 Years
Min: -4.02   Max: 0.08
Current: -2.72

-4.02
0.08

During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was 0.08. The lowest was -4.02. And the median was -2.68.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Best Buy Co Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.1225+0.528 * 0.9758+0.404 * 1.1487+0.892 * 0.9858+0.115 * 1.0037
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0012+4.679 * -0.0809-0.327 * 1.0261
=-2.72

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $1,174 Mil.
Revenue was 8945 + 8533 + 8443 + 13623 = $39,544 Mil.
Gross Profit was 2203 + 2062 + 2145 + 2951 = $9,361 Mil.
Total Current Assets was $11,021 Mil.
Total Assets was $14,542 Mil.
Property, Plant and Equipment(Net PPE) was $2,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $654 Mil.
Selling, General & Admin. Expense(SGA) was $7,574 Mil.
Total Current Liabilities was $8,166 Mil.
Long-Term Debt was $1,324 Mil.
Net Income was 194 + 198 + 229 + 479 = $1,100 Mil.
Non Operating Income was 8 + 8 + 8 + -1 = $23 Mil.
Cash Flow from Operations was 107 + 805 + 483 + 859 = $2,254 Mil.
Accounts Receivable was $1,061 Mil.
Revenue was 8819 + 8528 + 8558 + 14209 = $40,114 Mil.
Gross Profit was 2112 + 2098 + 2030 + 3026 = $9,266 Mil.
Total Current Assets was $11,735 Mil.
Total Assets was $15,175 Mil.
Property, Plant and Equipment(Net PPE) was $2,329 Mil.
Depreciation, Depletion and Amortization(DDA) was $666 Mil.
Selling, General & Admin. Expense(SGA) was $7,674 Mil.
Total Current Liabilities was $8,395 Mil.
Long-Term Debt was $1,256 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1174 / 39544) / (1061 / 40114)
=0.02968845 / 0.02644962
=1.1225

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(9266 / 40114) / (9361 / 39544)
=0.23099167 / 0.23672365
=0.9758

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (11021 + 2298) / 14542) / (1 - (11735 + 2329) / 15175)
=0.08410122 / 0.07321252
=1.1487

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=39544 / 40114
=0.9858

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(666 / (666 + 2329)) / (654 / (654 + 2298))
=0.22237062 / 0.22154472
=1.0037

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(7574 / 39544) / (7674 / 40114)
=0.19153348 / 0.19130478
=1.0012

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((1324 + 8166) / 14542) / ((1256 + 8395) / 15175)
=0.65259249 / 0.63598023
=1.0261

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1100 - 23 - 2254) / 14542
=-0.0809

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Best Buy Co Inc has a M-score of -2.72 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Best Buy Co Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Jan13Jan14Jan15Jan16
DSRI 1.07160.89953.02520.98851.15061.06640.63990.98520.9264
GMI 1.02631.02310.97620.99910.971.04331.04411.03190.9645
AQI 1.1621.4471.32190.91620.99380.70210.47481.46080.9819
SGI 1.16491.11381.12471.09391.01020.91380.89340.99330.9799
DEPI 0.97480.98940.93490.86140.90990.95190.99050.97191.0161
SGAI 0.95560.97941.08160.97911.03170.95541.03640.94291.024
LVGI 0.96641.14161.04210.91180.95341.25390.98050.94980.9968
TATA -0.0298-0.0586-0.0504-0.05150.0025-0.2875-0.0429-0.0478-0.0325
M-score -2.31-2.60-0.66-2.67-2.34-4.02-3.30-2.50-2.74

Best Buy Co Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 0.60570.68350.98521.13230.98880.96270.92641.12620.92421.1225
GMI 1.09511.08781.03191.01970.97540.96480.96450.95840.97320.9758
AQI 0.99161.01381.46081.07131.17940.98210.98191.02160.96291.1487
SGI 1.39661.38870.99331.00891.03151.03380.97990.9790.97750.9858
DEPI 0.89130.81980.97190.92160.89070.92091.01611.03281.02671.0037
SGAI 0.87420.88160.94290.95670.97961.00081.0241.02051.00861.0012
LVGI 0.94510.94930.94980.94920.96430.98110.99681.02671.03351.0261
TATA -0.0443-0.0353-0.0478-0.0546-0.0638-0.047-0.0325-0.0645-0.0973-0.0809
M-score -2.62-2.52-2.50-2.55-2.70-2.73-2.74-2.71-3.06-2.72
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