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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 -3.38. 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 * 0.9913||+||0.404 * 0.9967||+||0.892 * 1.0026||+||0.115 * 0.9969|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0027||+||4.679 * -0.1184||-||0.327 * 1.1366|
|This Year (Jan16) TTM:||Last Year (Jan15) TTM:|
|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.
Net Income was 94.532 + -1.508 + 17.636 + 32.213 = $143 Mil.
Non Operating Income was -2.812 + -0.673 + -1.742 + 0.028 = $-5 Mil.
Cash Flow from Operations was 290.034 + -64.345 + 29.138 + 87.525 = $342 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 1593.349 + 1107.095 + 1195.363 + 1281.271 = $5,177 Mil.
Gross Profit was 649.929 + 430.942 + 469.527 + 493.556 = $2,044 Mil.
Total Current Assets was $999 Mil.
Total Assets was $1,636 Mil.
Property, Plant and Equipment(Net PPE) was $551 Mil.
Depreciation, Depletion and Amortization(DDA) was $106 Mil.
Selling, General & Admin. Expense(SGA) was $1,700 Mil.
Total Current Liabilities was $588 Mil.
Long-Term Debt was $62 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 / 5190.582)||/||(0 / 5177.078)|
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)|
|=||(440.007 / 5177.078)||/||(647.229 / 5190.582)|
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 - (994.432 + 559.924) / 1640.37)||/||(1 - (999.275 + 550.555) / 1635.891)|
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))|
|=||(105.849 / (105.849 + 550.555))||/||(108.054 / (108.054 + 559.924))|
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)|
|=||(1708.717 / 5190.582)||/||(1699.764 / 5177.078)|
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)|
|=||((62.3 + 678.448) / 1640.37)||/||((62.1 + 587.829) / 1635.891)|
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|
|=||(142.873 - -5.199||-||342.352)||/||1640.37|
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 -3.08 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