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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-2.90 (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 -2.90 suggests that the company is not a manipulator.

BKS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: -0.46
Current: -2.9

-3.45
-0.46

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -0.46. The lowest was -3.45. And the median was -2.76.


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 * 0.956+0.528 * 1.0255+0.404 * 1.0665+0.892 * 0.962+0.115 * 0.9862
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9991+4.679 * -0.0765-0.327 * 1.0742
=-2.90

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $76 Mil.
Revenue was 858.548 + 913.882 + 876.684 + 1413.947 = $4,063 Mil.
Gross Profit was 255.375 + 277.539 + 265.758 + 491.655 = $1,290 Mil.
Total Current Assets was $1,435 Mil.
Total Assets was $2,258 Mil.
Property, Plant and Equipment(Net PPE) was $289 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $1,137 Mil.
Total Current Liabilities was $1,372 Mil.
Long-Term Debt was $191 Mil.
Net Income was -20.409 + -14.416 + -30.608 + 80.262 = $15 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -79.373 + 27.623 + -50.365 + 289.742 = $188 Mil.
Accounts Receivable was $82 Mil.
Revenue was 894.654 + 978.559 + 910.079 + 1440.132 = $4,223 Mil.
Gross Profit was 269.786 + 300.098 + 299.807 + 505.784 = $1,375 Mil.
Total Current Assets was $1,582 Mil.
Total Assets was $2,448 Mil.
Property, Plant and Equipment(Net PPE) was $323 Mil.
Depreciation, Depletion and Amortization(DDA) was $143 Mil.
Selling, General & Admin. Expense(SGA) was $1,183 Mil.
Total Current Liabilities was $1,386 Mil.
Long-Term Debt was $192 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)
=(75.744 / 4063.061) / (82.355 / 4223.424)
=0.0186421 / 0.01949958
=0.956

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)
=(1375.475 / 4223.424) / (1290.327 / 4063.061)
=0.3256777 / 0.3175751
=1.0255

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 - (1435.335 + 288.693) / 2257.763) / (1 - (1582.005 + 323.184) / 2447.726)
=0.23639992 / 0.2216494
=1.0665

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
=4063.061 / 4223.424
=0.962

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))
=(142.751 / (142.751 + 323.184)) / (130.111 / (130.111 + 288.693))
=0.30637535 / 0.31067277
=0.9862

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)
=(1136.904 / 4063.061) / (1182.829 / 4223.424)
=0.27981465 / 0.280064
=0.9991

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)
=((191.423 + 1372.414) / 2257.763) / ((192 + 1386.254) / 2447.726)
=0.69264887 / 0.64478377
=1.0742

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
=(14.829 - 0 - 187.627) / 2257.763
=-0.0765

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 -2.90 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 local exchange's currency.

Barnes & Noble Inc Annual Data

Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 0.98311.08590.76270.50851.44961.10080.79340.8370.47681.2415
GMI 0.98631.02680.98231.06981.12120.96031.08950.8450.87741.041
AQI 0.92690.96521.06272.10871.00460.95520.96971.02241.23480.7152
SGI 1.0311.02840.94661.13451.20451.01870.95930.93310.67340.969
DEPI 1.01391.00970.98970.83770.81050.93210.97210.91131.02760.9558
SGAI 1.03121.00911.05970.97310.96931.04791.0041.02791.10161.0188
LVGI 0.97741.05011.00731.08671.06311.00350.90010.94630.97241.3029
TATA -0.0378-0.0919-0.1027-0.0247-0.0745-0.0119-0.0737-0.10380.012-0.1094
M-score -2.68-2.82-3.22-2.49-2.20-2.48-2.99-3.25-3.17-3.00

Barnes & Noble Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
DSRI 0.8520.86220.27520.38841.04030.7681.28231.52381.25370.956
GMI 0.81860.82270.84650.93170.95410.92010.96120.98030.98051.0255
AQI 1.01991.03841.15041.23481.01270.8010.81510.71520.90761.0665
SGI 0.93650.95080.89740.82650.79780.67660.73810.78940.81710.962
DEPI 0.92790.9260.83140.92471.18471.01971.1331.06220.82810.9862
SGAI 1.02911.03591.07731.02821.01731.10031.05471.09161.1170.9991
LVGI 1.00910.9230.95140.97241.00131.231.11941.30291.21821.0742
TATA -0.0445-0.0569-0.0364-0.041-0.0905-0.0357-0.0606-0.1094-0.0829-0.0765
M-score -2.99-2.98-3.45-3.33-3.05-3.36-2.87-2.93-2.96-2.90
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