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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

BBY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.82   Max: -0.14
Current: -2.73

-3.82
-0.14

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.


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 * 0.9627+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
=-2.73

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

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

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)
=(1061 / 40114) / (1066 / 38801)
=0.02644962 / 0.02747352
=0.9627

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)
=(2098 / 38801) / (2112 / 40114)
=0.22285508 / 0.23099167
=0.9648

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 - (11735 + 2329) / 15175) / (1 - (12063 + 2524) / 15762)
=0.07321252 / 0.07454638
=0.9821

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
=40114 / 38801
=1.0338

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))
=0.20478891 / 0.22237062
=0.9209

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)
=0.19130478 / 0.19115487
=1.0008

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)
=0.63598023 / 0.64820454
=0.9811

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
=(937 - 26 - 1624) / 15175
=-0.047

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.


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

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Jan14Jan15
DSRI 0.97831.04111.07160.89953.02520.97961.16110.9560.71380.9852
GMI 1.01020.94531.02631.02310.97620.99850.97071.01671.07141.0319
AQI 1.13911.09231.1621.4471.32190.91620.99380.70210.47481.2168
SGI 1.11751.12451.16491.11381.12471.10391.00111.01930.80090.9933
DEPI 0.93261.09090.97480.98940.93490.86140.90990.95190.99050.9719
SGAI 0.99011.07040.95560.97941.08160.99551.01471.00190.98820.9429
LVGI 0.92550.98580.96641.14161.04210.91180.95341.25390.98050.9499
TATA -0.0969-0.0571-0.0298-0.0583-0.0504-0.05150.0025-0.2884-0.0429-0.0478
M-score -2.77-2.59-2.31-2.59-0.66-2.67-2.33-4.05-3.29-2.60

Best Buy Co Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 0.85790.71280.68510.95240.8340.9130.98521.13230.98880.9627
GMI 1.01361.01691.05641.04481.09341.08221.03191.01970.97540.9648
AQI 0.59320.51610.50590.87380.99161.01381.21680.86290.95250.9821
SGI 0.75020.73790.84860.9761.01441.03970.99331.00891.03151.0338
DEPI 0.92980.97570.98911.15181.1471.07770.97190.92160.89070.9209
SGAI 1.12261.10330.98390.88360.86430.86470.94290.95670.97961.0008
LVGI 0.97761.01970.92110.90080.94510.94930.94990.94960.96470.9811
TATA 0.0477-0.0161-0.0429-0.0267-0.0443-0.0353-0.0478-0.0545-0.0638-0.047
M-score -2.79-3.27-3.25-2.63-2.72-2.59-2.60-2.64-2.79-2.73
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