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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

BBY' s Beneish M-Score Range Over the Past 10 Years
Min: -4.02   Max: 0.08
Current: -3.06

-4.02
0.08

During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was 0.08. The lowest was -4.02. 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 * 0.9242+0.528 * 0.9732+0.404 * 0.9629+0.892 * 0.9775+0.115 * 1.0267
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0086+4.679 * -0.0973-0.327 * 1.0335
=-3.06

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

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Accounts Receivable was $926 Mil.
Revenue was 8533 + 8443 + 13623 + 8819 = $39,418 Mil.
Gross Profit was 2062 + 2145 + 2951 + 2112 = $9,270 Mil.
Total Current Assets was $9,694 Mil.
Total Assets was $13,254 Mil.
Property, Plant and Equipment(Net PPE) was $2,295 Mil.
Depreciation, Depletion and Amortization(DDA) was $658 Mil.
Selling, General & Admin. Expense(SGA) was $7,558 Mil.
Total Current Liabilities was $6,800 Mil.
Long-Term Debt was $1,341 Mil.
Net Income was 198 + 229 + 479 + 125 = $1,031 Mil.
Non Operating Income was 8 + 8 + -1 + 3 = $18 Mil.
Cash Flow from Operations was 805 + 483 + 859 + 155 = $2,302 Mil.
Accounts Receivable was $1,025 Mil.
Revenue was 8528 + 8558 + 14209 + 9032 = $40,327 Mil.
Gross Profit was 2098 + 2030 + 3026 + 2076 = $9,230 Mil.
Total Current Assets was $9,980 Mil.
Total Assets was $13,559 Mil.
Property, Plant and Equipment(Net PPE) was $2,235 Mil.
Depreciation, Depletion and Amortization(DDA) was $663 Mil.
Selling, General & Admin. Expense(SGA) was $7,666 Mil.
Total Current Liabilities was $6,838 Mil.
Long-Term Debt was $1,220 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)
=(926 / 39418) / (1025 / 40327)
=0.02349181 / 0.02541721
=0.9242

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)
=(9230 / 40327) / (9270 / 39418)
=0.22887891 / 0.23517175
=0.9732

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 - (9694 + 2295) / 13254) / (1 - (9980 + 2235) / 13559)
=0.09544289 / 0.09912235
=0.9629

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
=39418 / 40327
=0.9775

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))
=(663 / (663 + 2235)) / (658 / (658 + 2295))
=0.22877847 / 0.22282425
=1.0267

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)
=(7558 / 39418) / (7666 / 40327)
=0.19173981 / 0.19009597
=1.0086

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)
=((1341 + 6800) / 13254) / ((1220 + 6838) / 13559)
=0.61422967 / 0.59429161
=1.0335

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
=(1031 - 18 - 2302) / 13254
=-0.0973

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 -3.06 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

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Jan14Jan15Jan16
DSRI 1.04111.07160.89953.02520.98851.15061.06640.63990.98520.9264
GMI 0.94531.02631.02310.97620.99910.971.04331.04411.03190.9645
AQI 1.09231.1621.4471.32190.91620.99380.70210.47481.46080.9819
SGI 1.12451.16491.11381.12471.09391.01020.91380.89340.99330.9799
DEPI 1.09090.97480.98940.93490.86140.90990.95190.99050.97191.0161
SGAI 1.07040.95560.97941.08160.97911.03170.95541.03640.94291.024
LVGI 0.98580.96641.14161.04210.91180.95341.25390.98050.94980.9968
TATA -0.0506-0.0298-0.0586-0.0504-0.05150.0025-0.2875-0.0429-0.0478-0.0325
M-score -2.56-2.31-2.60-0.66-2.67-2.34-4.02-3.30-2.50-2.74

Best Buy Co Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
DSRI 0.95240.8340.9130.98521.13230.98880.96270.92641.12620.9242
GMI 1.04481.09341.08221.03191.01970.97540.96480.96450.95840.9732
AQI 0.87380.99161.01381.46081.07131.17940.98210.98191.02160.9629
SGI 0.9761.01441.03970.99331.00891.03151.03380.97990.9790.9775
DEPI 1.15181.1471.07770.97190.92160.89070.92091.01611.03281.0267
SGAI 0.88360.86430.86470.94290.95670.97961.00081.0241.02051.0086
LVGI 0.90080.94510.94930.94980.94920.96430.98110.99681.02671.0335
TATA -0.0267-0.0443-0.0353-0.0478-0.0546-0.0638-0.047-0.0325-0.0645-0.0973
M-score -2.63-2.72-2.59-2.50-2.55-2.70-2.73-2.74-2.71-3.06
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