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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-3.23 (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 -3.23 suggests that the company is not a manipulator.

BBY' s 10-Year Beneish M-Score Range
Min: -4.05   Max: -0.64
Current: -3.23

-4.05
-0.64

During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was -0.64. The lowest was -4.05. And the median was -2.63.


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 * 0.656+0.528 * 1.0701+0.404 * 0.5059+0.892 * 0.8862+0.115 * 0.9891
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9753+4.679 * -0.0431-0.327 * 0.9211
=-3.23

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

This Year (Jan14) TTM:Last Year (Oct12) TTM:
Accounts Receivable was $1,308 Mil.
Revenue was 14368 + 9362 + 9300 + 9380 = $42,410 Mil.
Gross Profit was 2881 + 2170 + 2469 + 2170 = $9,690 Mil.
Total Current Assets was $10,485 Mil.
Total Assets was $14,013 Mil.
Property, Plant and Equipment(Net PPE) was $2,598 Mil.
Depreciation, Depletion and Amortization(DDA) was $716 Mil.
Selling, General & Admin. Expense(SGA) was $8,391 Mil.
Total Current Liabilities was $7,436 Mil.
Long-Term Debt was $1,612 Mil.
Net Income was 293 + 54 + 266 + -81 = $532 Mil.
Non Operating Income was 11 + 12 + 19 + 0 = $42 Mil.
Cash Flow from Operations was 770 + 305 + 24 + -5 = $1,094 Mil.
Accounts Receivable was $2,250 Mil.
Revenue was 9381 + 10547 + 11610 + 16319 = $47,857 Mil.
Gross Profit was 2228 + 2564 + 2907 + 4002 = $11,701 Mil.
Total Current Assets was $11,846 Mil.
Total Assets was $17,556 Mil.
Property, Plant and Equipment(Net PPE) was $3,407 Mil.
Depreciation, Depletion and Amortization(DDA) was $926 Mil.
Selling, General & Admin. Expense(SGA) was $9,709 Mil.
Total Current Liabilities was $11,148 Mil.
Long-Term Debt was $1,158 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)
=(1308 / 42410) / (2250 / 47857)
=0.03084178 / 0.04701507
=0.656

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)
=(2170 / 47857) / (2881 / 42410)
=0.24449924 / 0.22848385
=1.0701

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 - (10485 + 2598) / 14013) / (1 - (11846 + 3407) / 17556)
=0.06636694 / 0.13118022
=0.5059

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
=42410 / 47857
=0.8862

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))
=(926 / (926 + 3407)) / (716 / (716 + 2598))
=0.21370875 / 0.21605311
=0.9891

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)
=(8391 / 42410) / (9709 / 47857)
=0.19785428 / 0.20287523
=0.9753

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)
=((1612 + 7436) / 14013) / ((1158 + 11148) / 17556)
=0.64568615 / 0.70095694
=0.9211

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
=(532 - 42 - 1094) / 14013
=-0.0431

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 -3.23 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

Aug11Nov11Feb12Apr12Jul12Oct12Apr13Jul13Oct13Jan14
DSRI 1.14881.16040.9561.02931.08320.73360.50750.85640.71090.656
GMI 0.9971.01131.01671.01371.01881.01341.02811.01291.01561.0701
AQI 0.9430.9110.70210.73860.7520.9120.74640.59320.51610.5059
SGI 0.98430.99111.01931.02961.01340.95490.8070.75150.740.8862
DEPI 0.95730.93220.95190.9430.95370.98660.88910.92980.97570.9891
SGAI 1.00220.99411.00190.99480.98921.0041.10661.12361.1050.9753
LVGI 1.04591.10781.25391.19341.16280.97391.02810.97761.01970.9211
TATA -0.0796-0.0987-0.2884-0.2275-0.1885-0.12020.01320.0481-0.0157-0.0431
M-score -2.77-2.87-4.05-3.66-3.42-3.35-3.17-2.79-3.27-3.23
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