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Best Buy Co Inc (NYSE:BBY)
Beneish M-Score
-2.75 (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 -2.74 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: -2.75

-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 -2.66.


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 * 0.9264+0.528 * 0.9645+0.404 * 0.9819+0.892 * 0.9799+0.115 * 1.0161
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.024+4.679 * -0.0325-0.327 * 0.9968
=-2.74

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
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.
Net Income was 479 + 125 + 164 + 129 = $897 Mil.
Non Operating Income was -1 + 3 + 4 + 9 = $15 Mil.
Cash Flow from Operations was 859 + 155 + 318 + -10 = $1,322 Mil.
Accounts Receivable was $1,280 Mil.
Revenue was 14209 + 9032 + 8459 + 8639 = $40,339 Mil.
Gross Profit was 3026 + 2076 + 1978 + 1967 = $9,047 Mil.
Total Current Assets was $11,472 Mil.
Total Assets was $15,245 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 $1,572 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)
=(1162 / 39528) / (1280 / 40339)
=0.02939688 / 0.03173108
=0.9264

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)
=(2112 / 40339) / (2951 / 39528)
=0.22427428 / 0.23251872
=0.9645

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 - (9886 + 2346) / 13519) / (1 - (11472 + 2295) / 15245)
=0.09519935 / 0.09694982
=0.9819

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
=39528 / 40339
=0.9799

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))
=(656 / (656 + 2295)) / (657 / (657 + 2346))
=0.22229753 / 0.21878122
=1.0161

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)
=(7618 / 39528) / (7592 / 40339)
=0.19272414 / 0.18820496
=1.024

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)
=((1339 + 6925) / 13519) / ((1572 + 7777) / 15245)
=0.61128782 / 0.61325025
=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
=(897 - 15 - 1322) / 13519
=-0.0325

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 -2.74 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 1.04111.07160.89953.02520.97961.1490.96610.68351.02880.9264
GMI 0.94531.02631.02310.97620.99850.97341.01371.08531.01880.9645
AQI 1.09231.1621.4471.32190.91620.99380.70210.47481.46080.9819
SGI 1.12451.16491.11381.12471.10391.01161.00860.83640.95120.9799
DEPI 1.09090.97480.98940.93490.86140.90990.95190.99050.97191.0161
SGAI 1.07040.95560.97941.08160.99551.03380.98350.97950.95121.024
LVGI 0.98580.96641.14161.04210.91180.95341.25390.98050.94980.9968
TATA -0.0468-0.0298-0.0586-0.0504-0.05150.002-0.2884-0.0435-0.0478-0.0325
M-score -2.54-2.31-2.60-0.66-2.67-2.34-4.05-3.28-2.50-2.74

Best Buy Co Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.60990.95240.8340.9130.98521.13230.98880.96270.92641.1262
GMI 1.02541.04481.09341.08221.03191.01970.97540.96480.96450.9584
AQI 0.50590.87380.99161.01381.46080.86290.95250.98210.98191.2684
SGI 0.95310.9761.01441.03970.99331.00891.03151.03380.97990.979
DEPI 0.98911.15181.1471.07770.97190.92160.89070.92091.01611.0328
SGAI 1.03440.88360.86430.86470.94290.95670.97961.00081.0241.0205
LVGI 0.92110.90080.94510.94930.94980.94960.96470.98110.99681.0263
TATA -0.0429-0.0267-0.0443-0.0353-0.0478-0.0545-0.0638-0.047-0.0325-0.0645
M-score -3.25-2.63-2.72-2.59-2.50-2.64-2.79-2.73-2.74-2.61
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