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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 -1.77. The lowest was -4.74. And the median was -2.71.
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 * 0.9425||+||0.528 * 1.0218||+||0.404 * 0.6639||+||0.892 * 0.9657||+||0.115 * 1.0181|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9638||+||4.679 * -0.0424||-||0.327 * 1.0303|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|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.
Net Income was 0.561 + 2.87 + -8.945 + -7.641 = $-13 Mil.
Non Operating Income was -0.263 + -0.029 + -0.358 + -0.012 = $-1 Mil.
Cash Flow from Operations was 17.994 + -8.702 + -37.545 + 41.127 = $13 Mil.
|Accounts Receivable was $206 Mil.
Revenue was 549.845 + 531.494 + 443.944 + 486.275 = $2,012 Mil.
Gross Profit was 64.58 + 62.033 + 52.676 + 54.349 = $234 Mil.
Total Current Assets was $504 Mil.
Total Assets was $627 Mil.
Property, Plant and Equipment(Net PPE) was $106 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $213 Mil.
Total Current Liabilities was $218 Mil.
Long-Term Debt was $383 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)|
|=||(187.344 / 1942.546)||/||(205.845 / 2011.558)|
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)|
|=||(59.983 / 2011.558)||/||(60.824 / 1942.546)|
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 - (482.631 + 105.183) / 598.829)||/||(1 - (503.691 + 106.35) / 627.425)|
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))|
|=||(9.746 / (9.746 + 106.35))||/||(9.452 / (9.452 + 105.183))|
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)|
|=||(198.707 / 1942.546)||/||(213.49 / 2011.558)|
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)|
|=||((247.855 + 342.623) / 598.829)||/||((382.514 + 217.977) / 627.425)|
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|
|=||(-13.155 - -0.662||-||12.874)||/||598.829|
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 -2.89 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