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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

BBY' s 10-Year Beneish M-Score Range
Min: -4.05   Max: -0.66
Current: -2.6

-4.05
-0.66

During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was -0.66. The lowest was -4.05. And the median was -2.64.


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 * 0.9852+0.528 * 1.0319+0.404 * 1.2168+0.892 * 0.9933+0.115 * 0.9719
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9429+4.679 * -0.0478-0.327 * 0.9499
=-2.60

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $1,280 Mil.
Revenue was 13028 + 9380 + 8896 + 9035 = $40,339 Mil.
Gross Profit was 2844 + 2128 + 2055 + 2020 = $9,047 Mil.
Total Current Assets was $11,729 Mil.
Total Assets was $15,256 Mil.
Property, Plant and Equipment(Net PPE) was $2,295 Mil.
Depreciation, Depletion and Amortization(DDA) was $656 Mil.
Selling, General & Admin. Expense(SGA) was $7,592 Mil.
Total Current Liabilities was $7,777 Mil.
Long-Term Debt was $1,580 Mil.
Net Income was 519 + 107 + 146 + 461 = $1,233 Mil.
Non Operating Income was 3 + 8 + 10 + 6 = $27 Mil.
Cash Flow from Operations was 1161 + 287 + 179 + 308 = $1,935 Mil.
Accounts Receivable was $1,308 Mil.
Revenue was 12671 + 9327 + 9266 + 9347 = $40,611 Mil.
Gross Profit was 2626 + 2157 + 2458 + 2158 = $9,399 Mil.
Total Current Assets was $10,485 Mil.
Total Assets was $14,013 Mil.
Property, Plant and Equipment(Net PPE) was $2,598 Mil.
Depreciation, Depletion and Amortization(DDA) was $716 Mil.
Selling, General & Admin. Expense(SGA) was $8,106 Mil.
Total Current Liabilities was $7,436 Mil.
Long-Term Debt was $1,612 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)
=(1280 / 40339) / (1308 / 40611)
=0.03173108 / 0.03220802
=0.9852

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)
=(2128 / 40611) / (2844 / 40339)
=0.23143976 / 0.22427428
=1.0319

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 - (11729 + 2295) / 15256) / (1 - (10485 + 2598) / 14013)
=0.08075511 / 0.06636694
=1.2168

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
=40339 / 40611
=0.9933

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))
=(716 / (716 + 2598)) / (656 / (656 + 2295))
=0.21605311 / 0.22229753
=0.9719

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)
=(7592 / 40339) / (8106 / 40611)
=0.18820496 / 0.19960109
=0.9429

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)
=((1580 + 7777) / 15256) / ((1612 + 7436) / 14013)
=0.61333246 / 0.64568615
=0.9499

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
=(1233 - 27 - 1935) / 15256
=-0.0478

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 -2.60 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

Jul12Oct12Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 1.08320.73360.50790.85790.71280.68510.94310.81660.88610.9852
GMI 1.01881.01341.02851.01361.01691.05641.04911.10031.09221.0319
AQI 0.7520.9120.74640.59320.51610.50590.87380.99161.01381.2168
SGI 1.01340.95490.80630.75020.73790.84860.98571.0361.07130.9933
DEPI 0.95370.98660.88910.92980.97570.98911.15181.1471.07770.9719
SGAI 0.98921.0041.1061.12261.10330.98390.88210.86060.86090.9429
LVGI 1.16280.97391.02810.97761.01970.92110.90080.94510.94930.9499
TATA -0.1885-0.12020.01280.0477-0.0161-0.0429-0.0268-0.0445-0.0358-0.0478
M-score -3.42-3.35-3.17-2.79-3.27-3.25-2.63-2.72-2.59-2.60
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