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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.
During the past 13 years, the highest Beneish M-Score of BlueLinx Holdings Inc was -1.73. The lowest was -4.76. And the median was -2.74.
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 BlueLinx Holdings 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 * 0.8975||+||0.528 * 0.9473||+||0.404 * 1.067||+||0.892 * 0.9717||+||0.115 * 0.8444|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.044||+||4.679 * -0.1367||-||0.327 * 0.9987|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $163 Mil.|
Revenue was 476.049 + 509.011 + 474.326 + 428.15 = $1,888 Mil.
Gross Profit was 60.05 + 57.387 + 57.596 + 51.47 = $227 Mil.
Total Current Assets was $401 Mil.
Total Assets was $500 Mil.
Property, Plant and Equipment(Net PPE) was $89 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $202 Mil.
Total Current Liabilities was $175 Mil.
Long-Term Debt was $318 Mil.
Net Income was 15.008 + -3.144 + -6.145 + -6.062 = $-0 Mil.
Non Operating Income was 0.017 + -0.135 + 0.372 + -0.221 = $0 Mil.
Cash Flow from Operations was 25.773 + 25.697 + -51.64 + 68.18 = $68 Mil.
|Accounts Receivable was $187 Mil.
Revenue was 517.831 + 515.656 + 454.949 + 454.11 = $1,943 Mil.
Gross Profit was 60.824 + 59.983 + 50.196 + 49.815 = $221 Mil.
Total Current Assets was $483 Mil.
Total Assets was $599 Mil.
Property, Plant and Equipment(Net PPE) was $105 Mil.
Depreciation, Depletion and Amortization(DDA) was $9 Mil.
Selling, General & Admin. Expense(SGA) was $199 Mil.
Total Current Liabilities was $343 Mil.
Long-Term Debt was $248 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(163.388 / 1887.536)||/||(187.344 / 1942.546)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(220.818 / 1942.546)||/||(226.503 / 1887.536)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (401.177 + 89.439) / 500.438)||/||(1 - (482.631 + 105.183) / 598.829)|
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.
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))|
|=||(9.452 / (9.452 + 105.183))||/||(9.678 / (9.678 + 89.439))|
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)|
|=||(201.569 / 1887.536)||/||(198.707 / 1942.546)|
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)|
|=||((318.245 + 174.549) / 500.438)||/||((247.855 + 342.623) / 598.829)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-0.343 - 0.033||-||68.01)||/||500.438|
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.
BlueLinx Holdings Inc has a M-score of -3.26 suggests that the company will not be a manipulator.
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
BlueLinx Holdings Inc Annual Data
BlueLinx Holdings Inc Quarterly Data