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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

BKS' s 10-Year Beneish M-Score Range
Min: -3.38   Max: -0.46
Current: -2.77

-3.38
-0.46

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -0.46. The lowest was -3.38. And the median was -2.72.


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 * 0.9004+0.528 * 0.8605+0.404 * 1.0465+0.892 * 0.9796+0.115 * 0.9493
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.047+4.679 * -0.0265-0.327 * 0.9514
=-2.77

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $262 Mil.
Revenue was 1961.151 + 1687.82 + 1236.447 + 1321.906 = $6,207 Mil.
Gross Profit was 628.037 + 459.888 + 382.692 + 424.351 = $1,895 Mil.
Total Current Assets was $2,368 Mil.
Total Assets was $3,876 Mil.
Property, Plant and Equipment(Net PPE) was $454 Mil.
Depreciation, Depletion and Amortization(DDA) was $207 Mil.
Selling, General & Admin. Expense(SGA) was $1,589 Mil.
Total Current Liabilities was $2,034 Mil.
Long-Term Debt was $0 Mil.
Net Income was 72.168 + 12.298 + -28.449 + -36.704 = $19 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 197.156 + 193.629 + -139.032 + -129.66 = $122 Mil.
Accounts Receivable was $297 Mil.
Revenue was 1995.79 + 1734.159 + 1329.502 + 1277.021 = $6,336 Mil.
Gross Profit was 603.441 + 461.942 + 368.201 + 230.9 = $1,664 Mil.
Total Current Assets was $2,534 Mil.
Total Assets was $4,141 Mil.
Property, Plant and Equipment(Net PPE) was $530 Mil.
Depreciation, Depletion and Amortization(DDA) was $224 Mil.
Selling, General & Admin. Expense(SGA) was $1,549 Mil.
Total Current Liabilities was $2,284 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)
=(261.763 / 6207.324) / (296.759 / 6336.472)
=0.04217002 / 0.04683347
=0.9004

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)
=(459.888 / 6336.472) / (628.037 / 6207.324)
=0.26268308 / 0.30527938
=0.8605

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 - (2367.598 + 454.063) / 3876.243) / (1 - (2534.256 + 530.273) / 4141.177)
=0.27206292 / 0.25998599
=1.0465

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
=6207.324 / 6336.472
=0.9796

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))
=(224.462 / (224.462 + 530.273)) / (207.153 / (207.153 + 454.063))
=0.29740505 / 0.31329097
=0.9493

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)
=(1589.017 / 6207.324) / (1549.268 / 6336.472)
=0.25599067 / 0.24450009
=1.047

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 + 2034.2) / 3876.243) / ((0 + 2284.174) / 4141.177)
=0.5247865 / 0.55157604
=0.9514

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
=(19.313 - 0 - 122.093) / 3876.243
=-0.0265

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 -2.77 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 1.61061.03450.98311.08590.76270.50871.44891.10080.79340.837
GMI 0.98330.99350.98631.02680.98231.06931.12170.95691.09330.845
AQI 0.73940.99550.92690.96521.06272.10871.00460.95280.97221.0224
SGI 1.11471.04711.0311.02840.94661.13391.2051.01870.95930.9331
DEPI 0.93521.04721.01391.00970.98970.83770.81050.93210.97210.9113
SGAI 1.03581.02811.03121.00911.05970.97350.96881.04791.0041.0279
LVGI 1.04151.00730.97741.05011.00731.08671.06311.05660.79821.0135
TATA -0.1242-0.1114-0.0382-0.0941-0.1027-0.0254-0.0745-0.0108-0.0737-0.1038
M-score -2.54-2.93-2.68-2.83-3.22-2.49-2.20-2.50-2.95-3.27

Barnes & Noble Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.95041.02450.79341.13970.90250.82060.8370.83350.86220.9004
GMI 0.97010.99581.09331.11551.11141.01840.8450.81770.82080.8605
AQI 0.89660.95340.97220.98531.05930.99811.02241.01991.03841.0465
SGI 1.02110.97440.95930.93730.91720.91280.93310.93650.95080.9796
DEPI 0.90850.95290.97210.98981.00640.97970.91130.92790.9260.9493
SGAI 1.01951.02651.0041.0081.01150.98121.02791.02911.03591.047
LVGI 0.97930.92180.79820.90290.9681.00281.01350.950.9230.9514
TATA -0.0663-0.0377-0.0737-0.0779-0.0654-0.1169-0.1038-0.0445-0.0569-0.0265
M-score -2.88-2.66-2.95-2.69-2.86-3.26-3.27-2.98-2.99-2.77
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