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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

BBY' s 10-Year Beneish M-Score Range
Min: -4.05   Max: 0.08
Current: -2.58

-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 * 0.8791+0.528 * 1.1081+0.404 * 1.0138+0.892 * 1.0798+0.115 * 1.0777
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8505+4.679 * -0.0363-0.327 * 0.9493
=-2.58

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $1,066 Mil.
Revenue was 9380 + 8896 + 9035 + 14470 = $41,781 Mil.
Gross Profit was 2128 + 2055 + 2020 + 2917 = $9,120 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 $7,894 Mil.
Total Current Liabilities was $8,626 Mil.
Long-Term Debt was $1,591 Mil.
Net Income was 107 + 146 + 461 + 293 = $1,007 Mil.
Non Operating Income was 8 + 10 + 6 + 11 = $35 Mil.
Cash Flow from Operations was 287 + 179 + 308 + 770 = $1,544 Mil.
Accounts Receivable was $1,123 Mil.
Revenue was 9327 + 9266 + 9347 + 10753 = $38,693 Mil.
Gross Profit was 2157 + 2458 + 2158 + 2586 = $9,359 Mil.
Total Current Assets was $11,234 Mil.
Total Assets was $15,068 Mil.
Property, Plant and Equipment(Net PPE) was $2,726 Mil.
Depreciation, Depletion and Amortization(DDA) was $772 Mil.
Selling, General & Admin. Expense(SGA) was $8,596 Mil.
Total Current Liabilities was $8,665 Mil.
Long-Term Debt was $1,624 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)
=(1066 / 41781) / (1123 / 38693)
=0.02551399 / 0.02902334
=0.8791

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)
=(2055 / 38693) / (2128 / 41781)
=0.24187838 / 0.21828104
=1.1081

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 - (12063 + 2524) / 15762) / (1 - (11234 + 2726) / 15068)
=0.07454638 / 0.07353332
=1.0138

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
=41781 / 38693
=1.0798

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))
=(772 / (772 + 2726)) / (650 / (650 + 2524))
=0.22069754 / 0.20478891
=1.0777

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)
=(7894 / 41781) / (8596 / 38693)
=0.18893756 / 0.22215905
=0.8505

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)
=((1591 + 8626) / 15762) / ((1624 + 8665) / 15068)
=0.64820454 / 0.6828378
=0.9493

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
=(1007 - 35 - 1544) / 15762
=-0.0363

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 -2.58 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 0.93790.97831.04111.07160.89953.02520.97961.1490.96610.6835
GMI 0.98731.01020.94531.02631.02310.97620.99850.97341.01371.0853
AQI 0.82871.13911.09231.1621.4471.32190.91620.99380.70210.4748
SGI 1.17211.11751.12451.16491.11381.12471.10391.01161.00860.8364
DEPI 0.89240.93261.09090.97480.98940.93490.86140.90990.95190.9905
SGAI 0.99020.99011.07040.95560.97941.08160.99551.03380.98350.9795
LVGI 0.95250.92550.98580.96641.14161.04210.91180.95341.25390.9805
TATA -0.0719-0.0969-0.0571-0.0298-0.0583-0.0504-0.05150.002-0.2884-0.0435
M-score -2.79-2.77-2.59-2.31-2.59-0.66-2.67-2.34-4.05-3.28

Best Buy Co Inc Quarterly Data

Apr12Jul12Oct12Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 1.04011.09460.72060.49140.82840.68750.67480.93310.80920.8791
GMI 1.01081.01591.00881.02581.01131.0141.07211.06541.1161.1081
AQI 0.73860.7520.9120.74640.59320.51610.50590.87380.99161.0138
SGI 1.01881.00280.97210.83340.77690.76510.86150.99621.04551.0798
DEPI 0.9430.95370.98660.88910.92980.97570.98911.15181.1471.0777
SGAI 0.97650.97110.99241.11061.12731.10880.96870.87110.85030.8505
LVGI 1.19341.16280.97391.02810.97761.01970.92110.90080.94510.9493
TATA -0.2275-0.1885-0.11960.01350.0485-0.0154-0.0435-0.0274-0.0451-0.0363
M-score -3.66-3.42-3.34-3.16-2.79-3.27-3.24-2.62-2.71-2.58
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