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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 -2.77.
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 * 0.9962||+||0.404 * 1.6692||+||0.892 * 1.009||+||0.115 * 0.9905|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9978||+||4.679 * -0.1118||-||0.327 * 1.2712|
|This Year (Apr16) TTM:||Last Year (Apr15) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 1312.575 + 1583.967 + 1116.474 + 1209.686 = $5,223 Mil.
Gross Profit was 517.681 + 647.229 + 440.007 + 475.834 = $2,081 Mil.
Total Current Assets was $956 Mil.
Total Assets was $1,607 Mil.
Property, Plant and Equipment(Net PPE) was $552 Mil.
Depreciation, Depletion and Amortization(DDA) was $107 Mil.
Selling, General & Admin. Expense(SGA) was $1,714 Mil.
Total Current Liabilities was $655 Mil.
Long-Term Debt was $154 Mil.
Net Income was 38.659 + 94.532 + -1.508 + 17.636 = $149 Mil.
Non Operating Income was 0.679 + -2.812 + -0.673 + -1.742 = $-5 Mil.
Cash Flow from Operations was 78.611 + 290.034 + -64.345 + 29.138 = $333 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 1280.455 + 1593.349 + 1107.095 + 1195.363 = $5,176 Mil.
Gross Profit was 504.116 + 649.929 + 430.942 + 469.527 = $2,055 Mil.
Total Current Assets was $1,022 Mil.
Total Assets was $1,649 Mil.
Property, Plant and Equipment(Net PPE) was $567 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $1,702 Mil.
Total Current Liabilities was $612 Mil.
Long-Term Debt was $41 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 / 5222.702)||/||(0 / 5176.262)|
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)|
|=||(2054.514 / 5176.262)||/||(2080.751 / 5222.702)|
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 - (956.165 + 552.289) / 1606.621)||/||(1 - (1021.519 + 566.939) / 1648.812)|
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))|
|=||(108.377 / (108.377 + 566.939))||/||(106.78 / (106.78 + 552.289))|
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)|
|=||(1713.883 / 5222.702)||/||(1702.464 / 5176.262)|
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)|
|=||((153.8 + 654.801) / 1606.621)||/||((40.5 + 612.313) / 1648.812)|
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|
|=||(149.319 - -4.548||-||333.438)||/||1606.621|
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 -2.82 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