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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

BKS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.38   Max: -0.46
Current: -2.89

-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 -2.73.


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 * 1.1242+0.528 * 0.9831+0.404 * 0.7301+0.892 * 0.9575+0.115 * 0.9088
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0125+4.679 * -0.0593-0.327 * 1.2288
=-2.89

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $82 Mil.
Revenue was 894.654 + 1217.542 + 1184.079 + 1961.151 = $5,257 Mil.
Gross Profit was 269.786 + 352.385 + 401.882 + 628.037 = $1,652 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 $193 Mil.
Selling, General & Admin. Expense(SGA) was $1,449 Mil.
Total Current Liabilities was $1,386 Mil.
Long-Term Debt was $192 Mil.
Net Income was -39.226 + -34.874 + -19.421 + 72.168 = $-21 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -52.922 + 10.239 + -195.845 + 362.239 = $124 Mil.
Accounts Receivable was $77 Mil.
Revenue was 936.544 + 1236.447 + 1321.906 + 1995.79 = $5,491 Mil.
Gross Profit was 285.731 + 382.692 + 424.351 + 603.441 = $1,696 Mil.
Total Current Assets was $2,308 Mil.
Total Assets was $3,840 Mil.
Property, Plant and Equipment(Net PPE) was $366 Mil.
Depreciation, Depletion and Amortization(DDA) was $189 Mil.
Selling, General & Admin. Expense(SGA) was $1,495 Mil.
Total Current Liabilities was $1,951 Mil.
Long-Term Debt was $64 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)
=(82.355 / 5257.426) / (76.505 / 5490.687)
=0.01566451 / 0.01393359
=1.1242

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)
=(352.385 / 5490.687) / (269.786 / 5257.426)
=0.30892582 / 0.31423933
=0.9831

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 - (1582.005 + 323.184) / 2447.726) / (1 - (2308.086 + 366.051) / 3839.816)
=0.2216494 / 0.30357679
=0.7301

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
=5257.426 / 5490.687
=0.9575

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))
=(188.631 / (188.631 + 366.051)) / (193.26 / (193.26 + 323.184))
=0.34007053 / 0.37421289
=0.9088

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)
=(1449.001 / 5257.426) / (1494.572 / 5490.687)
=0.27561035 / 0.27220127
=1.0125

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)
=((192 + 1386.254) / 2447.726) / ((64 + 1950.862) / 3839.816)
=0.64478377 / 0.52472879
=1.2288

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
=(-21.353 - 0 - 123.711) / 2447.726
=-0.0593

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 -2.89 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

Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 1.03450.98311.08590.76270.50871.44891.10080.79340.8370.8485
GMI 0.99350.98631.02680.98231.06931.12170.95691.09330.8450.9437
AQI 0.99550.92690.96521.06272.10871.00460.95280.97221.02241.0795
SGI 1.04711.0311.02840.94661.13391.2051.01870.95930.93310.9511
DEPI 1.04721.01391.00970.98970.83770.81050.93210.97210.91131.0148
SGAI 1.02811.03121.00911.05970.97350.96881.04791.0041.02791.011
LVGI 1.00730.97741.05011.00731.08671.06311.05660.79821.01350.9208
TATA -0.1114-0.0382-0.0941-0.1027-0.0254-0.0745-0.0108-0.0737-0.1038-0.006
M-score -2.93-2.68-2.83-3.22-2.49-2.20-2.50-2.95-3.27-2.66

Barnes & Noble Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.1150.90250.82060.8370.8520.47321.02440.96830.98481.1242
GMI 1.11551.11141.01840.8450.81770.79610.83290.91170.9460.9831
AQI 0.98531.05930.99811.02241.01991.13911.04651.07951.01270.7301
SGI 0.93730.91720.91280.93310.93650.83640.86110.83340.84270.9575
DEPI 0.98981.00640.97970.91130.92790.85060.94931.01481.01330.9088
SGAI 1.0081.01150.98121.02791.02911.10781.12061.08351.09191.0125
LVGI 0.90290.9681.00281.01350.950.92390.95140.92081.00131.2288
TATA -0.0779-0.0654-0.1169-0.1038-0.0445-0.0139-0.0265-0.006-0.0479-0.0593
M-score -2.71-2.86-3.26-3.27-2.97-3.24-2.79-2.69-2.90-2.89
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