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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-3.23 (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.

Overstock.com Inc has a M-score of -3.23 suggests that the company is not a manipulator.

OSTK' s Beneish M-Score Range Over the Past 10 Years
Min: -6.1   Max: 1.1
Current: -3.23

-6.1
1.1

During the past 13 years, the highest Beneish M-Score of Overstock.com Inc was 1.10. The lowest was -6.10. And the median was -3.09.


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 Overstock.com 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 * 1.1664+0.528 * 1.0323+0.404 * 0.7125+0.892 * 1.0644+0.115 * 1.2522
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0295+4.679 * -0.1802-0.327 * 1.1348
=-3.23

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $21 Mil.
Revenue was 441.564 + 418.54 + 413.677 + 480.27 = $1,754 Mil.
Gross Profit was 79.716 + 76.322 + 77.307 + 83.109 = $316 Mil.
Total Current Assets was $195 Mil.
Total Assets was $424 Mil.
Property, Plant and Equipment(Net PPE) was $137 Mil.
Depreciation, Depletion and Amortization(DDA) was $30 Mil.
Selling, General & Admin. Expense(SGA) was $227 Mil.
Total Current Liabilities was $208 Mil.
Long-Term Debt was $48 Mil.
Net Income was -3.098 + -0.904 + 13.429 + 0.11 = $10 Mil.
Non Operating Income was 1.251 + 3.992 + 4.156 + 1.102 = $11 Mil.
Cash Flow from Operations was 11.543 + 7.521 + -34.503 + 90.916 = $75 Mil.
Accounts Receivable was $17 Mil.
Revenue was 391.211 + 388.013 + 398.344 + 470.36 = $1,648 Mil.
Gross Profit was 72.451 + 73.657 + 75.437 + 85.38 = $307 Mil.
Total Current Assets was $152 Mil.
Total Assets was $332 Mil.
Property, Plant and Equipment(Net PPE) was $79 Mil.
Depreciation, Depletion and Amortization(DDA) was $23 Mil.
Selling, General & Admin. Expense(SGA) was $207 Mil.
Total Current Liabilities was $176 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)
=(21.045 / 1754.051) / (16.951 / 1647.928)
=0.01199794 / 0.01028625
=1.1664

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)
=(306.925 / 1647.928) / (316.454 / 1754.051)
=0.18624904 / 0.18041323
=1.0323

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 - (195.415 + 136.594) / 424.276) / (1 - (151.727 + 78.807) / 331.806)
=0.21746929 / 0.30521449
=0.7125

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
=1754.051 / 1647.928
=1.0644

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))
=(23.085 / (23.085 + 78.807)) / (30.173 / (30.173 + 136.594))
=0.22656342 / 0.18092908
=1.2522

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)
=(227.254 / 1754.051) / (207.385 / 1647.928)
=0.12955952 / 0.12584591
=1.0295

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)
=((47.576 + 207.944) / 424.276) / ((0 + 176.089) / 331.806)
=0.60224948 / 0.53069866
=1.1348

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
=(9.537 - 10.501 - 75.477) / 424.276
=-0.1802

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.

Overstock.com Inc has a M-score of -3.23 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.

Overstock.com Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.17780.99850.58031.55170.93721.02930.71681.34040.58530.7168
GMI 1.21560.71670.96550.9251.07991.02430.94110.95061.01871.0143
AQI 0.84820.39160.60120.89211.17471.46160.96838.42550.77271.1445
SGI 0.9860.96451.09171.05651.24310.96731.04271.18641.14791.1074
DEPI 0.52940.70371.08631.25231.11780.87680.90791.24141.35161.2191
SGAI 1.08350.8580.91211.01910.9011.14510.89351.61670.68181.0297
LVGI 1.06061.19781.08140.94720.84511.15710.89710.74191.06420.9867
TATA -0.2969-0.2366-0.0884-0.1924-0.0207-0.2527-0.09430.0159-0.1941-0.1298
M-score -3.75-4.09-3.38-2.86-2.22-3.56-3.151.05-3.65-3.16

Overstock.com Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.93890.89270.58530.84790.86450.98060.71681.12921.15131.1664
GMI 0.99531.01921.01871.0141.00141.00051.01431.02021.03221.0323
AQI 8.29542.96470.77270.87090.86151.36731.14451.02541.0340.7125
SGI 1.14151.14071.14791.16561.17261.1571.10741.07651.05841.0644
DEPI 1.251.38631.35161.14651.24031.13551.21911.30551.3241.2522
SGAI 1.58161.50.68180.69320.70740.73411.02971.02811.04361.0295
LVGI 0.70480.76891.06421.06611.08890.9530.98670.98321.03661.1348
TATA 0.11430.0391-0.1941-0.1908-0.1772-0.1335-0.1298-0.1458-0.1804-0.1802
M-score 1.09-1.43-3.65-3.36-3.29-2.76-3.16-2.92-3.08-3.23
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