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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-3.07 (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 -3.07 suggests that the company is not a manipulator.

BKS' s 10-Year Beneish M-Score Range
Min: -3.31   Max: -1.83
Current: -3.07

-3.31
-1.83

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -1.83. The lowest was -3.31. And the median was -2.70.


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 * 1.0331+0.528 * 0.845+0.404 * 1.0224+0.892 * 0.9331+0.115 * 0.9113
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0279+4.679 * -0.1038-0.327 * 0.9463
=-3.07

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $144 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.
Net Income was -36.704 + 63.23 + 13.229 + -87.022 = $-47 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -129.66 + 303.832 + 142.945 + 2.839 = $320 Mil.
Accounts Receivable was $149 Mil.
Revenue was 1277.021 + 2223.945 + 1884.532 + 1453.507 = $6,839 Mil.
Gross Profit was 238.559 + 549.561 + 480.498 + 413.888 = $1,683 Mil.
Total Current Assets was $2,047 Mil.
Total Assets was $3,733 Mil.
Property, Plant and Equipment(Net PPE) was $585 Mil.
Depreciation, Depletion and Amortization(DDA) was $233 Mil.
Selling, General & Admin. Expense(SGA) was $1,675 Mil.
Total Current Liabilities was $1,715 Mil.
Long-Term Debt was $204 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)
=(143.981 / 6381.357) / (149.369 / 6839.005)
=0.02256276 / 0.02184075
=1.0331

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)
=(603.441 / 6839.005) / (424.351 / 6381.357)
=0.2460162 / 0.29115046
=0.845

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 - (1980.438 + 490.713) / 3537.449) / (1 - (2047.135 + 584.909) / 3732.536)
=0.30143134 / 0.29483761
=1.0224

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
=6381.357 / 6839.005
=0.9331

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))
=(232.604 / (232.604 + 584.909)) / (222.764 / (222.764 + 490.713))
=0.28452636 / 0.3122231
=0.9113

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)
=(1606.936 / 6381.357) / (1675.376 / 6839.005)
=0.25181729 / 0.24497365
=1.0279

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 + 1721.645) / 3537.449) / ((204.25 + 1715.47) / 3732.536)
=0.48669112 / 0.51432056
=0.9463

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
=(-47.267 - 0 - 319.956) / 3537.449
=-0.1038

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 -3.07 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

Jan05Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14
DSRI 1.50571.26820.98311.08590.76271.15981.17081.04830.97021.0331
GMI 0.89620.99170.9881.02680.98231.06981.12650.95581.08950.845
AQI 0.89240.98540.93150.96521.06272.10871.00460.95520.96971.0224
SGI 0.8191.04711.0311.02840.94661.13451.20451.01870.95930.9331
DEPI 1.05111.04721.01391.00970.98970.83770.81050.93210.97210.9113
SGAI 1.14341.03061.02871.00911.05970.97310.96931.04791.0041.0279
LVGI 0.95791.00490.97951.04491.00731.08671.06311.00350.90010.9463
TATA -0.1248-0.1111-0.0382-0.0941-0.1027-0.0247-0.0759-0.0119-0.0737-0.1038
M-score -2.86-2.72-2.68-2.83-3.22-1.89-2.46-2.53-2.82-3.07

Barnes & Noble Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 1.08591.04830.90330.91371.00150.97021.1150.93850.83911.0331
GMI 0.96490.95580.96340.97120.99961.08951.10931.1031.00590.845
AQI 0.95210.95520.98290.90960.96770.96970.98531.04420.98341.0224
SGI 1.0251.01871.02051.02140.97490.95930.93730.91720.91280.9331
DEPI 0.88020.93210.91610.90850.95290.97210.98981.00640.97970.9113
SGAI 1.05581.04791.02731.01921.0261.0041.0081.01150.98121.0279
LVGI 1.01961.00350.97680.96250.90540.90010.850.9851.02090.9463
TATA -0.0614-0.0119-0.0622-0.0672-0.0387-0.073-0.0769-0.0658-0.1167-0.1038
M-score -2.73-2.53-2.87-2.91-2.67-2.82-2.69-2.84-3.26-3.07
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