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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

BBY' s 10-Year Beneish M-Score Range
Min: -4.05   Max: 0.08
Current: -2.7

-4.05
0.08

During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was 0.08. The lowest was -4.05. 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 * 0.7826+0.528 * 1.1144+0.404 * 0.9916+0.892 * 1.081+0.115 * 1.147
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8528+4.679 * -0.0451-0.327 * 0.9451
=-2.70

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $1,005 Mil.
Revenue was 8896 + 9035 + 14368 + 9362 = $41,661 Mil.
Gross Profit was 2055 + 2020 + 2881 + 2170 = $9,126 Mil.
Total Current Assets was $10,611 Mil.
Total Assets was $14,349 Mil.
Property, Plant and Equipment(Net PPE) was $2,532 Mil.
Depreciation, Depletion and Amortization(DDA) was $648 Mil.
Selling, General & Admin. Expense(SGA) was $7,978 Mil.
Total Current Liabilities was $7,251 Mil.
Long-Term Debt was $1,592 Mil.
Net Income was 146 + 461 + 293 + 54 = $954 Mil.
Non Operating Income was 10 + 6 + 11 + 12 = $39 Mil.
Cash Flow from Operations was 179 + 308 + 770 + 305 = $1,562 Mil.
Accounts Receivable was $1,188 Mil.
Revenue was 9266 + 9347 + 9381 + 10547 = $38,541 Mil.
Gross Profit was 2458 + 2158 + 2228 + 2564 = $9,408 Mil.
Total Current Assets was $9,414 Mil.
Total Assets was $13,284 Mil.
Property, Plant and Equipment(Net PPE) was $2,744 Mil.
Depreciation, Depletion and Amortization(DDA) was $837 Mil.
Selling, General & Admin. Expense(SGA) was $8,654 Mil.
Total Current Liabilities was $7,028 Mil.
Long-Term Debt was $1,634 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)
=(1005 / 41661) / (1188 / 38541)
=0.02412328 / 0.03082432
=0.7826

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)
=(2020 / 38541) / (2055 / 41661)
=0.24410368 / 0.21905379
=1.1144

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 - (10611 + 2532) / 14349) / (1 - (9414 + 2744) / 13284)
=0.08404767 / 0.08476363
=0.9916

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
=41661 / 38541
=1.081

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))
=(837 / (837 + 2744)) / (648 / (648 + 2532))
=0.23373359 / 0.20377358
=1.147

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)
=(7978 / 41661) / (8654 / 38541)
=0.19149804 / 0.2245401
=0.8528

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)
=((1592 + 7251) / 14349) / ((1634 + 7028) / 13284)
=0.61627988 / 0.65206263
=0.9451

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
=(954 - 39 - 1562) / 14349
=-0.0451

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 -2.70 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 own currency.

Best Buy Co Inc Annual Data

Feb04Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Jan14
DSRI 0.93790.97831.04111.07160.89953.02520.97961.16110.9560.6835
GMI 0.98731.01020.94531.02631.02310.97620.99850.97071.01671.0853
AQI 0.82871.13911.09231.1621.4471.32190.91620.99380.70210.4748
SGI 1.17211.11751.12451.16491.11381.12471.10391.00111.01930.8364
DEPI 0.89240.93261.09090.97480.98940.93490.86140.90990.95190.9905
SGAI 0.99020.99011.07040.95560.97941.08160.99551.01471.00190.9795
LVGI 0.95250.92550.98580.96641.14161.04210.91180.95341.25390.9805
TATA -0.0719-0.0969-0.0571-0.0298-0.0583-0.0504-0.05150.0025-0.2884-0.0435
M-score -2.79-2.77-2.59-2.31-2.59-0.66-2.67-2.33-4.05-3.28

Best Buy Co Inc Quarterly Data

Feb12Apr12Jul12Oct12Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 0.9561.02931.08320.73360.50790.85790.71210.6570.90420.7826
GMI 1.01671.01371.01881.01341.02851.01361.01641.07091.06341.1144
AQI 0.70210.73860.7520.9120.74640.59320.51610.50590.87380.9916
SGI 1.01931.02961.01340.95490.80630.75020.73860.88481.0281.081
DEPI 0.95190.9430.95370.98660.88910.92980.97570.98911.15181.147
SGAI 1.00190.99480.98921.0041.1061.12261.10390.97410.87370.8528
LVGI 1.25391.19341.16280.97391.02810.97761.01970.92110.90080.9451
TATA -0.2884-0.2275-0.1885-0.12020.01280.0477-0.0161-0.0435-0.0274-0.0451
M-score -4.05-3.66-3.42-3.35-3.17-2.79-3.27-3.24-2.62-2.70
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