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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-3.16 (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 -3.16 suggests that the company is not a manipulator.

OSTK' s Beneish M-Score Range Over the Past 10 Years
Min: -4.08   Max: 0.11
Current: -3.16

-4.08
0.11

During the past 13 years, the highest Beneish M-Score of Overstock.com Inc was 0.11. The lowest was -4.08. And the median was -3.06.


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 * 0.7168+0.528 * 1.0143+0.404 * 1.1445+0.892 * 1.1074+0.115 * 1.2191
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0297+4.679 * -0.1298-0.327 * 0.9867
=-3.16

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $9 Mil.
Revenue was 480.27 + 391.211 + 388.013 + 398.344 = $1,658 Mil.
Gross Profit was 83.109 + 72.451 + 73.657 + 75.437 = $305 Mil.
Total Current Assets was $248 Mil.
Total Assets was $429 Mil.
Property, Plant and Equipment(Net PPE) was $94 Mil.
Depreciation, Depletion and Amortization(DDA) was $25 Mil.
Selling, General & Admin. Expense(SGA) was $207 Mil.
Total Current Liabilities was $259 Mil.
Long-Term Debt was $14 Mil.
Net Income was 0.11 + -2.071 + 1.668 + 2.739 = $2 Mil.
Non Operating Income was 1.102 + 0.764 + 1.163 + 0.605 = $4 Mil.
Cash Flow from Operations was 90.916 + 11.467 + -4.778 + -43.089 = $55 Mil.
Accounts Receivable was $11 Mil.
Revenue was 470.36 + 352.991 + 332.545 + 341.207 = $1,497 Mil.
Gross Profit was 85.38 + 67.058 + 62.625 + 63.996 = $279 Mil.
Total Current Assets was $258 Mil.
Total Assets was $377 Mil.
Property, Plant and Equipment(Net PPE) was $52 Mil.
Depreciation, Depletion and Amortization(DDA) was $18 Mil.
Selling, General & Admin. Expense(SGA) was $181 Mil.
Total Current Liabilities was $243 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)
=(8.558 / 1657.838) / (10.781 / 1497.103)
=0.00516214 / 0.00720124
=0.7168

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)
=(72.451 / 1497.103) / (83.109 / 1657.838)
=0.18639933 / 0.18376584
=1.0143

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 - (248.463 + 93.696) / 429.129) / (1 - (258.062 + 52.071) / 376.865)
=0.20266633 / 0.17707137
=1.1445

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
=1657.838 / 1497.103
=1.1074

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))
=(18.064 / (18.064 + 52.071)) / (25.097 / (25.097 + 93.696))
=0.25756042 / 0.21126666
=1.2191

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)
=(206.655 / 1657.838) / (181.238 / 1497.103)
=0.12465331 / 0.12105914
=1.0297

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)
=((14.023 + 258.771) / 429.129) / ((0 + 242.802) / 376.865)
=0.6356923 / 0.64426784
=0.9867

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
=(2.446 - 3.634 - 54.516) / 429.129
=-0.1298

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 -3.16 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.

Overstock.com Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.17780.99850.58031.55170.93720.56862.47810.4350.94430.7168
GMI 1.21560.71670.96550.9251.07991.02430.94110.95061.01871.0143
AQI 0.84820.39160.60120.89211.17471.46160.96838.08760.80491.1445
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 1.08350.8580.91211.01910.9011.73750.58891.11550.98821.0297
LVGI 1.06061.19781.08140.66751.19931.15710.89710.75161.05050.9867
TATA -0.2969-0.2366-0.0884-0.1924-0.0207-0.2527-0.09430.0031-0.1941-0.1298
M-score -3.75-4.09-3.38-2.77-2.34-4.08-1.470.11-3.35-3.16

Overstock.com Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.89790.4350.86080.93890.89270.94430.84790.86450.98060.7168
GMI 0.92440.95060.96380.99531.01921.01871.0141.00141.00051.0143
AQI 2.1328.08767.37498.29542.96470.80490.87090.86151.36731.1445
SGI 1.16551.18641.16061.14151.14071.14791.16561.17261.1571.1074
DEPI 1.13991.24141.25561.251.38631.35161.14651.24031.13551.2191
SGAI 0.64521.11551.13311.10871.0590.98820.99541.00911.03991.0297
LVGI 0.85860.75160.71010.70480.76891.05051.06611.08890.9530.9867
TATA -0.18520.00310.08960.09940.0253-0.1941-0.1908-0.1772-0.1335-0.1298
M-score -2.750.110.611.11-1.42-3.35-3.41-3.34-2.81-3.16
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