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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.64 (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 -2.64 suggests that the company is not a manipulator.

BBY' s 10-Year Beneish M-Score Range
Min: -4.05   Max: 0.08
Current: -2.64

-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 -2.67.


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 * 1.1435+0.528 * 1.0156+0.404 * 0.8629+0.892 * 0.999+0.115 * 0.9216
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9579+4.679 * -0.0544-0.327 * 0.9496
=-2.64

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $995 Mil.
Revenue was 8558 + 13028 + 9380 + 8896 = $39,862 Mil.
Gross Profit was 2030 + 2844 + 2128 + 2055 = $9,057 Mil.
Total Current Assets was $10,396 Mil.
Total Assets was $13,719 Mil.
Property, Plant and Equipment(Net PPE) was $2,244 Mil.
Depreciation, Depletion and Amortization(DDA) was $658 Mil.
Selling, General & Admin. Expense(SGA) was $7,538 Mil.
Total Current Liabilities was $6,721 Mil.
Long-Term Debt was $1,224 Mil.
Net Income was 129 + 519 + 107 + 146 = $901 Mil.
Non Operating Income was 9 + 3 + 8 + 10 = $30 Mil.
Cash Flow from Operations was -10 + 1161 + 287 + 179 = $1,617 Mil.
Accounts Receivable was $871 Mil.
Revenue was 8639 + 12671 + 9327 + 9266 = $39,903 Mil.
Gross Profit was 1967 + 2626 + 2157 + 2458 = $9,208 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 $7,877 Mil.
Total Current Liabilities was $6,880 Mil.
Long-Term Debt was $1,604 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)
=(995 / 39862) / (871 / 39903)
=0.02496112 / 0.02182793
=1.1435

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)
=(2844 / 39903) / (2030 / 39862)
=0.23075959 / 0.22720887
=1.0156

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 - (10396 + 2244) / 13719) / (1 - (10118 + 2525) / 13911)
=0.07865005 / 0.09115089
=0.8629

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
=39862 / 39903
=0.999

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))
=(667 / (667 + 2525)) / (658 / (658 + 2244))
=0.2089599 / 0.22674018
=0.9216

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)
=(7538 / 39862) / (7877 / 39903)
=0.1891024 / 0.1974037
=0.9579

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)
=((1224 + 6721) / 13719) / ((1604 + 6880) / 13911)
=0.57912384 / 0.60987708
=0.9496

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
=(901 - 30 - 1617) / 13719
=-0.0544

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 -2.64 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

Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15
DSRI 0.50790.85790.71280.68510.95240.82470.89490.9951.14351.0209
GMI 1.02851.01361.01691.05641.04481.0961.08791.02781.01560.9666
AQI 0.74640.59320.51610.50590.87380.99161.01381.21680.86290.9525
SGI 0.80630.75020.73790.84860.9761.02571.06070.98360.9990.999
DEPI 0.88910.92980.97570.98911.15181.1471.07770.97190.92160.8907
SGAI 1.1061.12261.10330.98390.88360.86190.86210.94410.95790.9861
LVGI 1.02810.97761.01970.92110.90080.94510.94930.94990.94960.9647
TATA 0.01280.0477-0.0161-0.0429-0.0267-0.0444-0.0357-0.0477-0.0544-0.0635
M-score -3.17-2.79-3.27-3.25-2.63-2.72-2.59-2.60-2.64-2.79
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