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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.
During the past 13 years, the highest Beneish M-Score of Big Lots Inc was 5.82. The lowest was -4.00. And the median was -2.76.
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 Big Lots 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||+||0.528 * 0.9903||+||0.404 * 1.845||+||0.892 * 1.0049||+||0.115 * 0.9528|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0019||+||4.679 * -0.1106||-||0.327 * 1.1316|
|This Year (Jul16) TTM:||Last Year (Jul15) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 1203.155 + 1312.575 + 1583.967 + 1116.474 = $5,216 Mil.
Gross Profit was 486.423 + 517.681 + 647.229 + 440.007 = $2,091 Mil.
Total Current Assets was $977 Mil.
Total Assets was $1,625 Mil.
Property, Plant and Equipment(Net PPE) was $545 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $1,716 Mil.
Total Current Liabilities was $646 Mil.
Long-Term Debt was $258 Mil.
Net Income was 22.715 + 38.659 + 94.532 + -1.508 = $154 Mil.
Non Operating Income was -0.377 + 0.679 + -2.812 + -0.673 = $-3 Mil.
Cash Flow from Operations was 32.889 + 78.611 + 290.034 + -64.345 = $337 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 1209.686 + 1280.455 + 1593.349 + 1107.095 = $5,191 Mil.
Gross Profit was 475.834 + 504.116 + 649.929 + 430.942 = $2,061 Mil.
Total Current Assets was $1,029 Mil.
Total Assets was $1,664 Mil.
Property, Plant and Equipment(Net PPE) was $579 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General & Admin. Expense(SGA) was $1,705 Mil.
Total Current Liabilities was $595 Mil.
Long-Term Debt was $223 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)|
|=||(0 / 5216.171)||/||(0 / 5190.585)|
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)|
|=||(2060.821 / 5190.585)||/||(2091.34 / 5216.171)|
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 - (977.043 + 545.271) / 1624.66)||/||(1 - (1028.734 + 578.802) / 1664.363)|
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))|
|=||(108.53 / (108.53 + 578.802))||/||(108.312 / (108.312 + 545.271))|
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)|
|=||(1716.318 / 5216.171)||/||(1704.627 / 5190.585)|
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)|
|=||((257.9 + 645.755) / 1624.66)||/||((223.2 + 594.854) / 1664.363)|
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|
|=||(154.398 - -3.183||-||337.189)||/||1624.66|
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.
Big Lots Inc has a M-score of -2.71 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
Big Lots Inc Annual Data
Big Lots Inc Quarterly Data