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Barnes & Noble Inc (NYSE:BKS)
Beneish M-Score
-3.00 (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 -3.00 suggests that the company is not a manipulator.

BKS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.22   Max: -2.04
Current: -3

-3.22
-2.04

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -2.04. The lowest was -3.22. And the median was -2.82.


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 * 1.2358+0.528 * 1.04+0.404 * 0.7152+0.892 * 0.9734+0.115 * 0.9558
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0208+4.679 * -0.1094-0.327 * 1.3029
=-3.00

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

This Year (Apr16) TTM:Last Year (Apr15) TTM:
Accounts Receivable was $21 Mil.
Revenue was 876.684 + 1413.947 + 894.654 + 1217.542 = $4,403 Mil.
Gross Profit was 265.758 + 491.655 + 269.786 + 352.385 = $1,380 Mil.
Total Current Assets was $1,178 Mil.
Total Assets was $2,013 Mil.
Property, Plant and Equipment(Net PPE) was $299 Mil.
Depreciation, Depletion and Amortization(DDA) was $139 Mil.
Selling, General & Admin. Expense(SGA) was $1,263 Mil.
Total Current Liabilities was $1,194 Mil.
Long-Term Debt was $47 Mil.
Net Income was -30.608 + 80.262 + -39.226 + -34.874 = $-24 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -50.365 + 288.735 + -52.922 + 10.239 = $196 Mil.
Accounts Receivable was $17 Mil.
Revenue was 910.079 + 1440.132 + 936.544 + 1236.447 = $4,523 Mil.
Gross Profit was 299.807 + 505.784 + 285.731 + 382.692 = $1,474 Mil.
Total Current Assets was $1,612 Mil.
Total Assets was $3,112 Mil.
Property, Plant and Equipment(Net PPE) was $342 Mil.
Depreciation, Depletion and Amortization(DDA) was $149 Mil.
Selling, General & Admin. Expense(SGA) was $1,271 Mil.
Total Current Liabilities was $1,473 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)
=(21 / 4402.827) / (17.457 / 4523.202)
=0.00476966 / 0.00385943
=1.2358

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)
=(1474.014 / 4523.202) / (1379.584 / 4402.827)
=0.32587844 / 0.3133405
=1.04

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 - (1178.39 + 298.58) / 2012.782) / (1 - (1612.24 + 341.735) / 3112.431)
=0.26620469 / 0.37220295
=0.7152

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
=4402.827 / 4523.202
=0.9734

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))
=(149.143 / (149.143 + 341.735)) / (139.138 / (139.138 + 298.58))
=0.30382906 / 0.31787132
=0.9558

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)
=(1263.422 / 4402.827) / (1271.473 / 4523.202)
=0.28695699 / 0.2811002
=1.0208

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)
=((47.2 + 1193.871) / 2012.782) / ((0 + 1472.993) / 3112.431)
=0.61659484 / 0.47326125
=1.3029

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
=(-24.446 - 0 - 195.687) / 2012.782
=-0.1094

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 -3.00 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

Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 0.98311.08590.76270.50851.44961.10080.79340.8370.33751.7535
GMI 0.9881.02680.98231.06981.12650.95581.08950.8450.94370.9678
AQI 0.92690.96521.06272.10871.00460.95280.97221.02241.23480.7152
SGI 1.0311.02840.94661.13451.20451.01870.95930.93310.95110.686
DEPI 1.01391.00970.98970.83770.81050.93210.97210.91130.84661.1602
SGAI 1.02871.00911.05970.97310.96931.04791.0041.02791.0111.1101
LVGI 0.97741.05011.00731.08671.06311.05660.79821.01350.97241.3029
TATA -0.0378-0.0919-0.1027-0.0247-0.0759-0.0119-0.0737-0.1038-0.0062-0.1094
M-score -2.68-2.82-3.22-2.49-2.21-2.50-2.95-3.27-3.11-2.81

Barnes & Noble Inc Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
DSRI 0.82061.15271.180.69420.4910.32890.83650.90280.681.2358
GMI 1.01840.80330.77120.73220.7220.93980.9851.04991.14181.04
AQI 0.99811.02241.01991.13911.15041.23481.01270.73010.81510.7152
SGI 0.91280.67750.67610.57010.5030.97620.99211.19231.3920.9734
DEPI 0.97971.08351.10831.04231.15240.86431.05170.90590.81730.9558
SGAI 0.98121.1341.13741.27751.39091.01191.01910.90630.83031.0208
LVGI 1.00281.01350.950.92390.95140.97241.00131.22881.11941.3029
TATA -0.1169-0.0913-0.0327-0.00240.01760.012-0.0324-0.0361-0.0606-0.1094
M-score -3.26-3.17-2.86-3.26-3.43-3.01-2.79-2.72-2.74-3.00
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