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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

BKS' s 10-Year Beneish M-Score Range
Min: -3.31   Max: -0.46
Current: -2.99

-3.31
-0.46

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -0.46. The lowest was -3.31. 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 * 0.852+0.528 * 0.8186+0.404 * 1.0199+0.892 * 0.9365+0.115 * 0.9279
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0291+4.679 * -0.0445-0.327 * 1.0091
=-2.99

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $120 Mil.
Revenue was 1236.447 + 1321.906 + 1995.79 + 1734.159 = $6,288 Mil.
Gross Profit was 382.692 + 424.351 + 603.441 + 461.942 = $1,872 Mil.
Total Current Assets was $2,205 Mil.
Total Assets was $3,749 Mil.
Property, Plant and Equipment(Net PPE) was $479 Mil.
Depreciation, Depletion and Amortization(DDA) was $218 Mil.
Selling, General & Admin. Expense(SGA) was $1,583 Mil.
Total Current Liabilities was $1,969 Mil.
Long-Term Debt was $0 Mil.
Net Income was -28.449 + -36.704 + 63.23 + 13.229 = $11 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -139.032 + -129.66 + 303.832 + 142.945 = $178 Mil.
Accounts Receivable was $151 Mil.
Revenue was 1329.502 + 1277.021 + 2223.945 + 1884.532 = $6,715 Mil.
Gross Profit was 368.201 + 238.559 + 549.561 + 480.498 = $1,637 Mil.
Total Current Assets was $2,271 Mil.
Total Assets was $3,927 Mil.
Property, Plant and Equipment(Net PPE) was $562 Mil.
Depreciation, Depletion and Amortization(DDA) was $230 Mil.
Selling, General & Admin. Expense(SGA) was $1,642 Mil.
Total Current Liabilities was $2,037 Mil.
Long-Term Debt was $8 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)
=(120.313 / 6288.302) / (150.798 / 6715)
=0.01913283 / 0.02245689
=0.852

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)
=(424.351 / 6715) / (382.692 / 6288.302)
=0.24375562 / 0.29776337
=0.8186

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 - (2204.894 + 478.537) / 3748.654) / (1 - (2270.556 + 562.421) / 3927.214)
=0.28416146 / 0.27862933
=1.0199

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
=6288.302 / 6715
=0.9365

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))
=(229.898 / (229.898 + 562.421)) / (217.727 / (217.727 + 478.537))
=0.29015838 / 0.31270754
=0.9279

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)
=(1582.931 / 6288.302) / (1642.467 / 6715)
=0.2517263 / 0.24459672
=1.0291

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 + 1969.194) / 3748.654) / ((7.5 + 2036.842) / 3927.214)
=0.52530695 / 0.52055783
=1.0091

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
=(11.306 - 0 - 178.085) / 3748.654
=-0.0445

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 -2.99 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 1.50571.26820.98311.08590.76271.15980.63551.10080.79340.837
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 -2.86-2.72-2.68-2.83-3.22-1.89-2.96-2.48-2.99-3.25

Barnes & Noble Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 1.10080.90330.91371.00150.79341.1150.93850.83910.8370.852
GMI 0.95580.96340.97120.99961.08951.10931.1031.00590.8450.8186
AQI 0.95520.98290.90960.96770.96970.98531.04420.98341.02241.0199
SGI 1.01871.02051.02140.97490.95930.93730.91720.91280.93310.9365
DEPI 0.93210.91610.90850.95290.97210.98981.00640.97970.91130.9279
SGAI 1.04791.02731.01921.0261.0041.0081.01150.98121.02791.0291
LVGI 1.00350.97680.96250.90540.90010.850.9851.02090.94631.0091
TATA -0.0119-0.0622-0.0672-0.0387-0.073-0.0769-0.0658-0.1167-0.1038-0.0445
M-score -2.48-2.87-2.91-2.67-2.98-2.69-2.84-3.26-3.25-2.99
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