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Barnes & Noble, Inc. (NYSE:BKS)
Beneish M-Score
-3.26 (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 -3.26 suggests that the company is not a manipulator.

BKS' s 10-Year Beneish M-Score Range
Min: -3.38   Max: -0.46
Current: -3.26

-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 -2.69.


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 * 0.8206+0.528 * 1.0184+0.404 * 0.9981+0.892 * 0.9128+0.115 * 0.9797
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9812+4.679 * -0.1169-0.327 * 1.0028
=-3.26

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

This Year (Jan14) TTM:Last Year (Jan13) TTM:
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.
Net Income was 63.23 + 13.229 + -87.022 + -114.796 = $-125 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 303.832 + 142.945 + 2.839 + -90.949 = $359 Mil.
Accounts Receivable was $396 Mil.
Revenue was 2223.945 + 1884.532 + 1453.507 + 1379.71 = $6,942 Mil.
Gross Profit was 553.512 + 482.289 + 415.805 + 405.478 = $1,857 Mil.
Total Current Assets was $2,636 Mil.
Total Assets was $4,340 Mil.
Property, Plant and Equipment(Net PPE) was $573 Mil.
Depreciation, Depletion and Amortization(DDA) was $236 Mil.
Selling, General & Admin. Expense(SGA) was $1,730 Mil.
Total Current Liabilities was $2,260 Mil.
Long-Term Debt was $127 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)
=(296.759 / 6336.472) / (396.169 / 6941.694)
=0.04683347 / 0.05707094
=0.8206

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)
=(461.942 / 6941.694) / (603.441 / 6336.472)
=0.26752605 / 0.26268308
=1.0184

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 - (2534.256 + 530.273) / 4141.177) / (1 - (2636.408 + 573.369) / 4340.294)
=0.25998599 / 0.26047014
=0.9981

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
=6336.472 / 6941.694
=0.9128

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))
=(235.757 / (235.757 + 573.369)) / (224.462 / (224.462 + 530.273))
=0.29137242 / 0.29740505
=0.9797

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)
=(1549.268 / 6336.472) / (1729.728 / 6941.694)
=0.24450009 / 0.24917952
=0.9812

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 + 2284.174) / 4141.177) / ((127.25 + 2260.178) / 4340.294)
=0.55157604 / 0.55006136
=1.0028

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
=(-125.359 - 0 - 358.667) / 4141.177
=-0.1169

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 -3.26 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

Jan04Jan05Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13
DSRI 0.37381.61061.03450.98311.08590.76271.16041.17031.110.9162
GMI 1.00850.98330.99350.98631.02680.98231.06931.12170.95691.0933
AQI 1.32280.73940.99550.92690.96521.06272.10871.00460.95280.9722
SGI 1.11631.11471.04711.0311.02840.94661.13391.2051.01870.9593
DEPI 1.16430.93521.04721.01391.00970.98970.83770.81050.93210.9721
SGAI 0.99371.03581.02811.03121.00911.05970.97350.96881.04791.004
LVGI 0.88891.04151.00730.97741.05011.00731.08671.06311.05660.8549
TATA -0.0801-0.1242-0.1114-0.0382-0.0941-0.1027-0.0254-0.0745-0.0108-0.0737
M-score -3.14-2.54-2.93-2.68-2.83-3.22-1.89-2.46-2.49-2.86

Barnes & Noble, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
DSRI 1.25841.08431.110.90340.95041.02450.91621.1150.90250.8206
GMI 0.98860.96190.95690.96340.97010.99581.09331.11551.11141.0184
AQI 0.97220.95210.95280.98290.89660.95340.97220.98531.05930.9981
SGI 1.03211.02651.01871.02041.02110.97440.95930.93730.91720.9128
DEPI 0.90040.88020.93210.91610.90850.95290.97210.98981.00640.9797
SGAI 1.03311.05431.04791.02741.01951.02651.0041.0081.01150.9812
LVGI 1.00161.01961.05660.97680.97930.92180.85490.850.9681.0028
TATA -0.06-0.0602-0.0108-0.0609-0.0663-0.0377-0.0737-0.0779-0.0654-0.1169
M-score -2.53-2.73-2.49-2.87-2.88-2.66-2.86-2.69-2.86-3.26
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