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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.
Best Buy Co Inc has a M-score of -2.62 suggests that the company is not a manipulator.
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.
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|
|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
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)|
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)|
|=||(2881 / 40885)||/||(2020 / 42065)|
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 - (10118 + 2525) / 13911)||/||(1 - (10006 + 2830) / 14331)|
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))|
|=||(897 / (897 + 2830))||/||(667 / (667 + 2525))|
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)|
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)|
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|
|=||(1074 - 48||-||1407)||/||13911|
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.
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