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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-3.09 (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 -3.09 suggests that the company is not a manipulator.

BKS' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -1.84
Current: -3.09

-3.22
-1.84

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -1.84. The lowest was -3.22. And the median was -2.73.


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 * 1.0135
=-3.09

* 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 230.9 + 553.512 + 482.289 + 415.805 = $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 $77 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) / ((77 + 1715.47) / 3732.536)
=0.48669112 / 0.48022846
=1.0135

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 -3.09 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 1.61061.03450.98311.08590.76271.16041.17031.110.91621.0331
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 -2.54-2.93-2.68-2.83-3.22-1.89-2.46-2.49-2.84-3.09

Barnes & Noble Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 1.08431.110.90340.95041.02450.91621.1150.90250.82061.0331
GMI 0.96190.95690.96340.97010.99581.09331.11551.11141.01840.845
AQI 0.95210.95280.98290.89660.95340.97220.98531.05930.99811.0224
SGI 1.02651.01871.02041.02110.97440.95930.93730.91720.91280.9331
DEPI 0.88020.93210.91610.90850.95290.97210.98981.00640.97970.9113
SGAI 1.05431.04791.02741.01951.02651.0041.0081.01150.98121.0279
LVGI 1.01961.05660.97680.97930.92180.79820.850.9681.00281.0135
TATA -0.0602-0.0108-0.0609-0.0663-0.0377-0.0737-0.0779-0.0654-0.1169-0.1038
M-score -2.73-2.49-2.87-2.88-2.66-2.84-2.69-2.86-3.26-3.09
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