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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.62 (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 -2.62 suggests that the company is not a manipulator.

BBY' s 10-Year Beneish M-Score Range
Min: -4.05   Max: 0.08
Current: -2.62

-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 * 0.9035+0.528 * 1.063+0.404 * 0.8738+0.892 * 1.0289+0.115 * 1.1518
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8742+4.679 * -0.0274-0.327 * 0.9008
=-2.62

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $871 Mil.
Revenue was 9035 + 14368 + 9362 + 9300 = $42,065 Mil.
Gross Profit was 2020 + 2881 + 2170 + 2469 = $9,540 Mil.
Total Current Assets was $10,118 Mil.
Total Assets was $13,911 Mil.
Property, Plant and Equipment(Net PPE) was $2,525 Mil.
Depreciation, Depletion and Amortization(DDA) was $667 Mil.
Selling, General & Admin. Expense(SGA) was $8,215 Mil.
Total Current Liabilities was $6,880 Mil.
Long-Term Debt was $1,604 Mil.
Net Income was 461 + 293 + 54 + 266 = $1,074 Mil.
Non Operating Income was 6 + 11 + 12 + 19 = $48 Mil.
Cash Flow from Operations was 308 + 770 + 305 + 24 = $1,407 Mil.
Accounts Receivable was $937 Mil.
Revenue was 9347 + 9381 + 10547 + 11610 = $40,885 Mil.
Gross Profit was 2158 + 2228 + 2564 + 2907 = $9,857 Mil.
Total Current Assets was $10,006 Mil.
Total Assets was $14,331 Mil.
Property, Plant and Equipment(Net PPE) was $2,830 Mil.
Depreciation, Depletion and Amortization(DDA) was $897 Mil.
Selling, General & Admin. Expense(SGA) was $9,134 Mil.
Total Current Liabilities was $8,561 Mil.
Long-Term Debt was $1,142 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)
=(871 / 42065) / (937 / 40885)
=0.02070605 / 0.02291794
=0.9035

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)
=(2881 / 40885) / (2020 / 42065)
=0.24109086 / 0.22679187
=1.063

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 - (10118 + 2525) / 13911) / (1 - (10006 + 2830) / 14331)
=0.09115089 / 0.10431931
=0.8738

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
=42065 / 40885
=1.0289

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))
=(897 / (897 + 2830)) / (667 / (667 + 2525))
=0.24067615 / 0.2089599
=1.1518

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)
=(8215 / 42065) / (9134 / 40885)
=0.195293 / 0.22340712
=0.8742

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)
=((1604 + 6880) / 13911) / ((1142 + 8561) / 14331)
=0.60987708 / 0.67706371
=0.9008

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
=(1074 - 48 - 1407) / 13911
=-0.0274

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 -2.62 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

Nov11Feb12Apr12Jul12Oct12Apr13Jul13Oct13Jan14Apr14
DSRI 1.16040.9561.02931.08320.73360.50790.85710.71150.65650.9035
GMI 1.01131.01671.01371.01881.01341.02851.01341.01611.07061.063
AQI 0.9110.70210.73860.7520.9120.74640.59320.51610.50590.8738
SGI 0.99111.01931.02961.01340.95490.80630.75090.73930.88551.0289
DEPI 0.93220.95190.9430.95370.98660.88910.92980.97570.98911.1518
SGAI 0.99411.00190.99480.98921.0041.1061.1231.10430.97460.8742
LVGI 1.10781.25391.19341.16280.97391.02810.97761.01970.92110.9008
TATA -0.0987-0.2884-0.2275-0.1885-0.12020.01280.0477-0.0161-0.0435-0.0274
M-score -2.87-4.05-3.66-3.42-3.35-3.17-2.79-3.27-3.24-2.62
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