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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-3.78 (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 -3.78 suggests that the company is not a manipulator.

BKS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.78   Max: -2.04
Current: -3.78

-3.78
-2.04

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -2.04. The lowest was -3.78. 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 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 * 0.6597+0.528 * 0.9846+0.404 * 0.8181+0.892 * 0.7254+0.115 * 0.9679
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1272+4.679 * -0.1094-0.327 * 1.3759
=-3.78

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $21 Mil.
Revenue was 876.684 + 1413.947 + 894.654 + 1217.542 = $4,403 Mil.
Gross Profit was 265.758 + 491.655 + 269.786 + 352.385 = $1,380 Mil.
Total Current Assets was $1,178 Mil.
Total Assets was $2,013 Mil.
Property, Plant and Equipment(Net PPE) was $299 Mil.
Depreciation, Depletion and Amortization(DDA) was $139 Mil.
Selling, General & Admin. Expense(SGA) was $1,263 Mil.
Total Current Liabilities was $1,194 Mil.
Long-Term Debt was $47 Mil.
Net Income was -30.608 + 80.262 + -39.226 + -34.874 = $-24 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -50.365 + 288.735 + -52.922 + 10.239 = $196 Mil.
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.



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)
=(21 / 4402.827) / (43.88 / 6069.497)
=0.00476966 / 0.00722959
=0.6597

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)
=(1872.499 / 6069.497) / (1379.584 / 4402.827)
=0.30850975 / 0.3133405
=0.9846

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 - (1178.39 + 298.58) / 2012.782) / (1 - (1729.315 + 449.292) / 3229.505)
=0.26620469 / 0.32540529
=0.8181

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
=4402.827 / 6069.497
=0.7254

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))
=(199.652 / (199.652 + 449.292)) / (139.138 / (139.138 + 298.58))
=0.30765675 / 0.31787132
=0.9679

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)
=(1263.422 / 4402.827) / (1545.152 / 6069.497)
=0.28695699 / 0.25457661
=1.1272

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)
=((47.2 + 1193.871) / 2012.782) / ((0 + 1447.259) / 3229.505)
=0.61659484 / 0.44813648
=1.3759

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
=(-24.446 - 0 - 195.687) / 2012.782
=-0.1094

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 -3.78 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

Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 0.98311.08590.76270.50851.44961.10080.79340.8370.84850.6976
GMI 0.98631.02680.98231.06981.12650.95581.08950.8450.94370.9678
AQI 0.92690.96521.06272.10871.00460.95520.96971.02241.07950.8181
SGI 1.0311.02840.94661.13451.20451.01870.95930.93310.95110.686
DEPI 1.01391.00970.98970.83770.81050.93210.97210.91131.01480.9679
SGAI 1.03121.00911.05970.97310.96931.04791.0041.02791.0111.1101
LVGI 0.97741.05011.00731.08671.06311.00350.90010.94630.92081.3759
TATA -0.0378-0.0919-0.1027-0.0247-0.0759-0.0119-0.0737-0.1038-0.006-0.1094
M-score -2.68-2.82-3.22-2.49-2.21-2.48-2.99-3.25-2.66-3.79

Barnes & Noble Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
DSRI 0.8370.8520.86220.90040.84850.86250.6170.34920.65971.5121
GMI 0.8450.81860.82270.86440.94370.9780.95360.94870.98460.9566
AQI 1.02241.01991.03841.04651.07951.01270.8010.89610.81810.9076
SGI 0.93310.93650.95080.97960.95110.96220.84230.75880.72540.6775
DEPI 0.91130.92790.9260.94931.01481.01330.91260.93570.96791.0388
SGAI 1.02791.02911.03591.0471.0111.01821.08291.11211.12721.116
LVGI 0.94631.00910.9230.95140.92081.00131.231.11941.37591.2182
TATA -0.1038-0.0445-0.0569-0.0265-0.006-0.04790.0082-0.0288-0.1094-0.106
M-score -3.25-2.99-2.98-2.76-2.66-2.87-3.14-3.56-3.78-2.94
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