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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-2.66 (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.

Barnes & Noble Inc has a M-score of -2.66 suggests that the company is not a manipulator.

BKS' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -2.04
Current: -2.66

-3.27
-2.04

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -2.04. The lowest was -3.27. And the median was -2.68.


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 Barnes & Noble 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 * 0.8485+0.528 * 0.9437+0.404 * 1.0795+0.892 * 0.9511+0.115 * 1.0148
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.011+4.679 * -0.006-0.327 * 0.9208
=-2.66

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $44 Mil.
Revenue was 1184.079 + 1961.151 + 1687.82 + 1236.447 = $6,069 Mil.
Gross Profit was 401.882 + 628.037 + 459.888 + 382.692 = $1,872 Mil.
Total Current Assets was $1,729 Mil.
Total Assets was $3,230 Mil.
Property, Plant and Equipment(Net PPE) was $449 Mil.
Depreciation, Depletion and Amortization(DDA) was $200 Mil.
Selling, General & Admin. Expense(SGA) was $1,545 Mil.
Total Current Liabilities was $1,447 Mil.
Long-Term Debt was $0 Mil.
Net Income was -19.421 + 72.168 + 12.298 + -28.449 = $37 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -195.845 + 197.156 + 193.629 + -139.032 = $56 Mil.
Accounts Receivable was $54 Mil.
Revenue was 1321.906 + 1995.79 + 1734.159 + 1329.502 = $6,381 Mil.
Gross Profit was 424.351 + 603.441 + 461.942 + 368.201 = $1,858 Mil.
Total Current Assets was $1,980 Mil.
Total Assets was $3,537 Mil.
Property, Plant and Equipment(Net PPE) was $491 Mil.
Depreciation, Depletion and Amortization(DDA) was $223 Mil.
Selling, General & Admin. Expense(SGA) was $1,607 Mil.
Total Current Liabilities was $1,722 Mil.
Long-Term Debt was $0 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)
=(43.88 / 6069.497) / (54.375 / 6381.357)
=0.00722959 / 0.00852091
=0.8485

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)
=(628.037 / 6381.357) / (401.882 / 6069.497)
=0.29115046 / 0.30850975
=0.9437

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 - (1729.315 + 449.292) / 3229.505) / (1 - (1980.438 + 490.713) / 3537.449)
=0.32540529 / 0.30143134
=1.0795

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
=6069.497 / 6381.357
=0.9511

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))
=(222.764 / (222.764 + 490.713)) / (199.652 / (199.652 + 449.292))
=0.3122231 / 0.30765675
=1.0148

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)
=(1545.152 / 6069.497) / (1606.936 / 6381.357)
=0.25457661 / 0.25181729
=1.011

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)
=((0 + 1447.259) / 3229.505) / ((0 + 1721.645) / 3537.449)
=0.44813648 / 0.48669112
=0.9208

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
=(36.596 - 0 - 55.908) / 3229.505
=-0.006

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.

Barnes & Noble Inc has a M-score of -2.66 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 own currency.

Barnes & Noble Inc Annual Data

Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 1.03450.98311.08590.76270.50851.44961.10080.79340.8370.8485
GMI 0.99170.9881.02680.98231.06981.12650.95581.08950.8450.9437
AQI 0.99550.92690.96521.06272.10871.00460.95280.97221.02241.0795
SGI 1.04711.0311.02840.94661.13451.20451.01870.95930.93310.9511
DEPI 1.04721.01391.00970.98970.83770.81050.93210.97210.91131.0148
SGAI 1.03061.02871.00911.05970.97310.96931.04791.0041.02791.011
LVGI 1.00730.97741.05011.00731.08671.06311.05660.79821.01350.9208
TATA -0.1114-0.0382-0.0941-0.1027-0.0247-0.0759-0.0119-0.0737-0.1038-0.006
M-score -2.94-2.68-2.83-3.22-2.49-2.21-2.50-2.95-3.27-2.66

Barnes & Noble Inc Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 1.02450.79341.1150.90250.82060.8370.8520.86220.90040.8485
GMI 0.99581.09331.11551.11141.01840.8450.81770.82080.86050.9437
AQI 0.95340.97220.98531.05930.99811.02241.01991.03841.04651.0795
SGI 0.97440.95930.93730.91720.91280.93310.93650.95080.97960.9511
DEPI 0.95290.97210.98981.00640.97970.91130.92790.9260.94931.0148
SGAI 1.02651.0041.0081.01150.98121.02791.02911.03591.0471.011
LVGI 0.92180.79820.90290.9681.00281.01350.950.9230.95140.9208
TATA -0.0377-0.0737-0.0779-0.0654-0.1169-0.1038-0.0445-0.0569-0.0265-0.006
M-score -2.66-2.95-2.71-2.86-3.26-3.27-2.97-2.99-2.77-2.66
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