Switch to:
GuruFocus has detected 3 Warning Signs with Best Buy Co Inc $BBY.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

BBY' s Beneish M-Score Range Over the Past 10 Years
Min: -4.02   Max: -0.66
Current: -2.89

-4.02
-0.66

During the past 13 years, the highest Beneish M-Score of Best Buy Co Inc was -0.66. The lowest was -4.02. And the median was -2.60.


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 * 1.1629+0.528 * 0.9705+0.404 * 0.7937+0.892 * 0.9968+0.115 * 0.9859
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9938+4.679 * -0.0975-0.327 * 0.9968
=-2.89

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $1,347 Mil.
Revenue was 13482 + 8945 + 8533 + 8443 = $39,403 Mil.
Gross Profit was 3030 + 2203 + 2062 + 2145 = $9,440 Mil.
Total Current Assets was $10,516 Mil.
Total Assets was $13,856 Mil.
Property, Plant and Equipment(Net PPE) was $2,293 Mil.
Depreciation, Depletion and Amortization(DDA) was $654 Mil.
Selling, General & Admin. Expense(SGA) was $7,547 Mil.
Total Current Liabilities was $7,122 Mil.
Long-Term Debt was $1,321 Mil.
Net Income was 607 + 194 + 198 + 229 = $1,228 Mil.
Non Operating Income was 10 + 8 + 8 + 8 = $34 Mil.
Cash Flow from Operations was 1150 + 107 + 805 + 483 = $2,545 Mil.
Accounts Receivable was $1,162 Mil.
Revenue was 13623 + 8819 + 8528 + 8558 = $39,528 Mil.
Gross Profit was 2951 + 2112 + 2098 + 2030 = $9,191 Mil.
Total Current Assets was $9,886 Mil.
Total Assets was $13,519 Mil.
Property, Plant and Equipment(Net PPE) was $2,346 Mil.
Depreciation, Depletion and Amortization(DDA) was $657 Mil.
Selling, General & Admin. Expense(SGA) was $7,618 Mil.
Total Current Liabilities was $6,925 Mil.
Long-Term Debt was $1,339 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)
=(1347 / 39403) / (1162 / 39528)
=0.03418521 / 0.02939688
=1.1629

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)
=(9191 / 39528) / (9440 / 39403)
=0.23251872 / 0.23957567
=0.9705

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 - (10516 + 2293) / 13856) / (1 - (9886 + 2346) / 13519)
=0.07556293 / 0.09519935
=0.7937

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
=39403 / 39528
=0.9968

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))
=(657 / (657 + 2346)) / (654 / (654 + 2293))
=0.21878122 / 0.2219206
=0.9859

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)
=(7547 / 39403) / (7618 / 39528)
=0.19153364 / 0.19272414
=0.9938

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)
=((1321 + 7122) / 13856) / ((1339 + 6925) / 13519)
=0.60933891 / 0.61128782
=0.9968

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
=(1228 - 34 - 2545) / 13856
=-0.0975

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 -2.89 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 local exchange's currency.

Best Buy Co Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Jan13Jan14Jan15Jan16Jan17
DSRI 0.89953.02520.98851.15061.06641.40440.45560.98520.92641.1629
GMI 1.02310.97620.99910.971.04331.02441.01921.03190.96450.9705
AQI 1.4471.32190.91620.99380.70210.62650.75791.46080.98190.7937
SGI 1.11381.12471.09391.01020.91380.84151.06170.99330.97990.9968
DEPI 0.98940.93490.86140.90990.95191.05510.93880.97191.01610.9859
SGAI 0.97941.08160.97911.03170.95541.0730.96590.94291.0240.9938
LVGI 1.14161.04210.91180.95341.25391.08210.90610.94980.99680.9968
TATA -0.0586-0.0504-0.05150.0025-0.2875-0.1137-0.0429-0.0478-0.0325-0.0975
M-score -2.60-0.66-2.67-2.34-4.02-2.95-3.18-2.50-2.74-2.89

Best Buy Co Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.90760.98521.13230.98880.96270.92641.12620.92421.12251.1629
GMI 1.05511.03191.01970.97540.96480.96450.95840.97320.97580.9705
AQI 1.01381.46081.07131.17940.98210.98191.02160.96291.14870.7937
SGI 1.04590.99331.00891.03151.03380.97990.9790.97750.98580.9968
DEPI 0.9920.97190.92160.89070.92091.01611.03281.02671.00370.9859
SGAI 0.94610.94290.95670.97961.00081.0241.02051.00861.00120.9938
LVGI 0.94930.94980.94920.96430.98110.99681.02671.03351.02610.9968
TATA -0.0353-0.0478-0.0546-0.0638-0.047-0.0325-0.0645-0.0973-0.0809-0.0975
M-score -2.63-2.50-2.55-2.70-2.73-2.74-2.71-3.06-2.72-2.89
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK