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GuruFocus has detected 7 Warning Signs with Big Lots Inc $BIG.
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Big Lots Inc (NYSE:BIG)
Beneish M-Score
-2.47 (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 -2.47 suggests that the company is not a manipulator.

BIG' s Beneish M-Score Range Over the Past 10 Years
Min: -4   Max: 5.82
Current: -2.47

-4
5.82

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 -2.75.


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 * 0.9898+0.404 * 2.2105+0.892 * 1.001+0.115 * 0.948
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0003+4.679 * -0.0945-0.327 * 1.086
=-2.47

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

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1105.498 + 1203.155 + 1312.575 + 1583.967 = $5,205 Mil.
Gross Profit was 441.992 + 486.423 + 517.681 + 647.229 = $2,093 Mil.
Total Current Assets was $1,208 Mil.
Total Assets was $1,847 Mil.
Property, Plant and Equipment(Net PPE) was $541 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General & Admin. Expense(SGA) was $1,714 Mil.
Total Current Liabilities was $767 Mil.
Long-Term Debt was $363 Mil.
Net Income was 1.376 + 22.715 + 38.659 + 94.532 = $157 Mil.
Non Operating Income was 0.698 + -0.377 + 0.679 + -2.812 = $-2 Mil.
Cash Flow from Operations was -67.964 + 32.889 + 78.611 + 290.034 = $334 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1116.474 + 1209.686 + 1280.455 + 1593.349 = $5,200 Mil.
Gross Profit was 440.007 + 475.834 + 504.116 + 649.929 = $2,070 Mil.
Total Current Assets was $1,267 Mil.
Total Assets was $1,889 Mil.
Property, Plant and Equipment(Net PPE) was $577 Mil.
Depreciation, Depletion and Amortization(DDA) was $109 Mil.
Selling, General & Admin. Expense(SGA) was $1,712 Mil.
Total Current Liabilities was $729 Mil.
Long-Term Debt was $335 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 / 5205.195) / (0 / 5199.964)
=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)
=(2069.886 / 5199.964) / (2093.325 / 5205.195)
=0.39805776 / 0.40216073
=0.9898

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 - (1208.331 + 540.669) / 1847.243) / (1 - (1267.278 + 576.563) / 1889.297)
=0.05318358 / 0.02405974
=2.2105

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
=5205.195 / 5199.964
=1.001

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))
=(108.74 / (108.74 + 576.563)) / (108.689 / (108.689 + 540.669))
=0.15867434 / 0.16737917
=0.948

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)
=(1714.077 / 5205.195) / (1711.889 / 5199.964)
=0.32930121 / 0.3292117
=1.0003

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)
=((362.9 + 766.584) / 1847.243) / ((334.9 + 728.799) / 1889.297)
=0.61144311 / 0.56301312
=1.086

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
=(157.282 - -1.812 - 333.57) / 1847.243
=-0.0945

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 -2.47 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

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 1111111111
GMI 0.98021.0090.98850.98470.99921.01621.01441.00640.99210.9913
AQI 1.3051.29131.01090.66280.80151.42111.05010.70931.87320.9967
SGI 1.07070.98170.99761.01751.04771.04181.01030.98321.01021.0026
DEPI 1.03161.08011.1251.031.02780.97820.9110.9120.94330.9969
SGAI 0.94930.95151.0080.98820.9820.9920.99621.03211.01121.0027
LVGI 1.01361.66860.78180.90371.02971.18491.15190.82381.05611.1366
TATA -0.1496-0.1035-0.0415-0.1148-0.0576-0.0678-0.0593-0.042-0.1249-0.1184
M-score -3.00-3.06-2.59-3.11-2.79-2.64-2.78-2.76-2.73-3.08

Big Lots Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 1111111111
GMI 1.01441.02030.99210.97990.97950.97630.99130.99620.99030.9898
AQI 0.77140.77321.87321.16131.03530.85690.99671.66921.8452.2105
SGI 1.00111.00731.01021.00721.00721.00861.00261.0091.00491.001
DEPI 0.89390.92850.94330.97051.00780.9850.99690.99050.95280.948
SGAI 1.03371.03171.01121.01351.00761.01081.00270.99781.00191.0003
LVGI 0.9041.02281.05611.02021.24731.04721.13661.27121.13161.086
TATA -0.1068-0.1177-0.1249-0.0975-0.0814-0.0865-0.1184-0.1118-0.1106-0.0945
M-score -3.05-3.13-2.73-2.89-2.93-2.97-3.08-2.82-2.71-2.47
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