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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.
During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was -0.14. The lowest was -3.82. And the median was -2.87.
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 * 0.9627||+||0.528 * 0.9648||+||0.404 * 0.9821||+||0.892 * 1.0338||+||0.115 * 0.9209|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0008||+||4.679 * -0.047||-||0.327 * 0.9811|
|This Year (Oct15) TTM:||Last Year (Oct14) TTM:|
|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.
Net Income was 125 + 164 + 129 + 519 = $937 Mil.
Non Operating Income was 3 + 4 + 9 + 10 = $26 Mil.
Cash Flow from Operations was 155 + 318 + -10 + 1161 = $1,624 Mil.
|Accounts Receivable was $1,066 Mil.
Revenue was 9032 + 8459 + 8639 + 12671 = $38,801 Mil.
Gross Profit was 2076 + 1978 + 1967 + 2626 = $8,647 Mil.
Total Current Assets was $12,063 Mil.
Total Assets was $15,762 Mil.
Property, Plant and Equipment(Net PPE) was $2,524 Mil.
Depreciation, Depletion and Amortization(DDA) was $650 Mil.
Selling, General & Admin. Expense(SGA) was $7,417 Mil.
Total Current Liabilities was $8,626 Mil.
Long-Term Debt was $1,591 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1061 / 40114)||/||(1066 / 38801)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2098 / 38801)||/||(2112 / 40114)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (11735 + 2329) / 15175)||/||(1 - (12063 + 2524) / 15762)|
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.
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))|
|=||(650 / (650 + 2524))||/||(666 / (666 + 2329))|
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)|
|=||(7674 / 40114)||/||(7417 / 38801)|
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)|
|=||((1256 + 8395) / 15175)||/||((1591 + 8626) / 15762)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(937 - 26||-||1624)||/||15175|
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 -2.73 suggests that the company will not be a manipulator.
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
Best Buy Co Inc Annual Data
Best Buy Co Inc Quarterly Data