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GuruFocus has detected 4 Warning Signs with Big Lots Inc $BIG.
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Big Lots Inc (NYSE:BIG)
Beneish M-Score
-2.97 (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.

Big Lots Inc has a M-score of -2.97 suggests that the company is not a manipulator.

BIG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.38   Max: 5.82
Current: -2.97

-3.38
5.82

During the past 13 years, the highest Beneish M-Score of Big Lots Inc was 5.82. The lowest was -3.38. And the median was -2.76.


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 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 * 0.9865+0.404 * 1.0377+0.892 * 1.0019+0.115 * 0.9471
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0111+4.679 * -0.0998-0.327 * 1.0813
=-2.97

* 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 $0 Mil.
Revenue was 1579.211 + 1105.498 + 1203.155 + 1312.575 = $5,200 Mil.
Gross Profit was 653.323 + 441.992 + 486.423 + 517.681 = $2,099 Mil.
Total Current Assets was $994 Mil.
Total Assets was $1,608 Mil.
Property, Plant and Equipment(Net PPE) was $526 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $1,731 Mil.
Total Current Liabilities was $679 Mil.
Long-Term Debt was $106 Mil.
Net Income was 90.078 + 1.376 + 22.715 + 38.659 = $153 Mil.
Non Operating Income was 0.359 + 0.698 + -0.377 + 0.679 = $1 Mil.
Cash Flow from Operations was 268.389 + -67.964 + 32.889 + 78.611 = $312 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1583.967 + 1116.474 + 1209.686 + 1280.455 = $5,191 Mil.
Gross Profit was 647.229 + 440.007 + 475.834 + 504.116 = $2,067 Mil.
Total Current Assets was $994 Mil.
Total Assets was $1,640 Mil.
Property, Plant and Equipment(Net PPE) was $560 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $1,709 Mil.
Total Current Liabilities was $678 Mil.
Long-Term Debt was $62 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)
=(0 / 5200.439) / (0 / 5190.582)
=0 / 0
=1

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)
=(2067.186 / 5190.582) / (2099.419 / 5200.439)
=0.39825707 / 0.40370034
=0.9865

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 - (994.379 + 525.851) / 1607.707) / (1 - (994.432 + 559.924) / 1640.37)
=0.05441103 / 0.05243573
=1.0377

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
=5200.439 / 5190.582
=1.0019

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))
=(108.054 / (108.054 + 559.924)) / (108.315 / (108.315 + 525.851))
=0.16176281 / 0.17079913
=0.9471

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)
=(1731.006 / 5200.439) / (1708.717 / 5190.582)
=0.33285767 / 0.32919565
=1.0111

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)
=((106.4 + 678.595) / 1607.707) / ((62.3 + 678.448) / 1640.37)
=0.48826994 / 0.45157373
=1.0813

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
=(152.828 - 1.359 - 311.925) / 1607.707
=-0.0998

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 -2.97 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.

Big Lots Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1111111111
GMI 1.0090.98850.98470.99921.02111.01491.00670.98670.99130.9865
AQI 1.29131.01090.66280.80151.42111.05010.70931.87320.99671.0377
SGI 0.98170.99761.01751.04771.05051.0380.98180.97651.00261.0019
DEPI 1.08011.1251.031.02780.97820.9110.9120.94330.99690.9471
SGAI 0.95151.0080.98820.9820.9871.00961.04640.98921.00271.0111
LVGI 1.66860.78180.90371.02971.18491.15190.82381.05611.13661.0813
TATA -0.1035-0.0415-0.1148-0.0573-0.0678-0.0593-0.0413-0.1249-0.1184-0.0998
M-score -3.06-2.59-3.11-2.79-2.63-2.76-2.76-2.76-3.08-2.97

Big Lots Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1111111111
GMI 1.00890.98670.9760.97660.97650.99130.99620.99030.98980.9865
AQI 0.77321.87321.16131.03530.85690.99671.66921.8452.21051.0377
SGI 0.95470.97650.98190.99031.00071.00261.0091.00491.0011.0019
DEPI 0.92850.94330.97051.00780.9850.99690.99050.95280.9480.9471
SGAI 1.02980.98920.99370.99020.99621.00270.99781.00191.00031.0111
LVGI 1.02281.05611.02021.24731.04721.13661.27121.13161.0861.0813
TATA -0.1173-0.1249-0.0975-0.0814-0.0865-0.1184-0.1118-0.1106-0.0945-0.0998
M-score -3.18-2.76-2.91-2.95-2.97-3.08-2.82-2.71-2.47-2.97
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