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GuruFocus has detected 2 Warning Signs with BlueLinx Holdings Inc $BXC.
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BlueLinx Holdings Inc (NYSE:BXC)
Beneish M-Score
-2.78 (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.

BlueLinx Holdings Inc has a M-score of -2.78 suggests that the company is not a manipulator.

BXC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.97   Max: -2.05
Current: -2.78

-3.97
-2.05

During the past 13 years, the highest Beneish M-Score of BlueLinx Holdings Inc was -2.05. The lowest was -3.97. And the median was -2.71.


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 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 * 0.9256+0.528 * 0.9602+0.404 * 1.2114+0.892 * 0.9815+0.115 * 0.9147
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0585+4.679 * -0.0576-0.327 * 0.967
=-2.78

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $126 Mil.
Revenue was 421.657 + 476.049 + 509.011 + 474.326 = $1,881 Mil.
Gross Profit was 52.374 + 60.05 + 57.387 + 57.596 = $227 Mil.
Total Current Assets was $346 Mil.
Total Assets was $444 Mil.
Property, Plant and Equipment(Net PPE) was $88 Mil.
Depreciation, Depletion and Amortization(DDA) was $9 Mil.
Selling, General & Admin. Expense(SGA) was $204 Mil.
Total Current Liabilities was $154 Mil.
Long-Term Debt was $271 Mil.
Net Income was 10.365 + 15.008 + -3.144 + -6.145 = $16 Mil.
Non Operating Income was 0 + 0.017 + -0.135 + 0.372 = $0 Mil.
Cash Flow from Operations was 41.567 + 25.773 + 25.697 + -51.64 = $41 Mil.
Accounts Receivable was $139 Mil.
Revenue was 428.15 + 517.831 + 515.656 + 454.949 = $1,917 Mil.
Gross Profit was 51.47 + 60.824 + 59.983 + 50.196 = $222 Mil.
Total Current Assets was $402 Mil.
Total Assets was $513 Mil.
Property, Plant and Equipment(Net PPE) was $102 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $196 Mil.
Total Current Liabilities was $130 Mil.
Long-Term Debt was $378 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)
=(125.857 / 1881.043) / (138.545 / 1916.586)
=0.06690809 / 0.07228739
=0.9256

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)
=(222.473 / 1916.586) / (227.407 / 1881.043)
=0.11607775 / 0.1208941
=0.9602

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 - (345.81 + 88.322) / 444.137) / (1 - (402.024 + 101.576) / 513.142)
=0.02252683 / 0.01859524
=1.2114

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
=1881.043 / 1916.586
=0.9815

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))
=(9.741 / (9.741 + 101.576)) / (9.343 / (9.343 + 88.322))
=0.08750685 / 0.09566375
=0.9147

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)
=(203.551 / 1881.043) / (195.942 / 1916.586)
=0.10821177 / 0.10223491
=1.0585

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)
=((270.792 + 154.341) / 444.137) / ((377.773 + 130.173) / 513.142)
=0.9572114 / 0.98987415
=0.967

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
=(16.084 - 0.254 - 41.397) / 444.137
=-0.0576

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 -2.78 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 local exchange's currency.

BlueLinx Holdings Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.09360.68471.54250.91121.19751.04330.84621.04550.990.9256
GMI 0.95790.90230.96551.00510.97530.99271.13580.91730.99710.9602
AQI 1.30072.36170.95021.23730.49910.65651.03670.89850.63061.2114
SGI 0.78250.7250.59221.09620.97291.08681.1280.91980.96830.9815
DEPI 1.07050.91391.07481.17871.1831.1430.91150.91840.94350.9148
SGAI 1.24841.12261.170.95990.9660.95611.00920.93450.95751.0624
LVGI 1.00690.9911.05811.10770.96031.04061.00231.03261.02520.967
TATA -0.1224-0.3038-0.0611-0.05170.0210.094-0.0008-0.0023-0.0987-0.0576
M-score -3.10-3.97-2.71-2.63-2.40-2.05-2.44-2.61-3.14-2.78

BlueLinx Holdings Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.03651.04550.97910.98220.94250.991.05050.94190.89750.9256
GMI 0.9250.91730.9431.0081.02180.99710.95890.96550.94730.9602
AQI 1.00230.89850.85260.75250.66390.63060.74771.05271.0671.2114
SGI 0.95520.91980.95110.97770.96570.96830.97270.97710.97170.9815
DEPI 0.87730.91840.95050.97321.01810.94350.88940.83440.84440.9147
SGAI 0.97680.93350.92240.93220.91960.95840.98641.01041.0441.0585
LVGI 1.02351.03261.02821.02971.03031.02521.02191.03080.99870.967
TATA 0.0226-0.0023-0.0166-0.0381-0.0424-0.0987-0.0607-0.1411-0.1367-0.0576
M-score -2.44-2.61-2.71-2.79-2.88-3.14-2.88-3.24-3.26-2.78
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