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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-1.32 (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 -1.32 signals that the company is a manipulator.

OSTK' s 10-Year Beneish M-Score Range
Min: -6.1   Max: 1.21
Current: -1.32

-6.1
1.21

During the past 13 years, the highest Beneish M-Score of Overstock.com Inc was 1.21. The lowest was -6.10. And the median was -3.19.


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 * 0.8927+0.528 * 1.0192+0.404 * 2.9647+0.892 * 1.1407+0.115 * 1.3863
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8285+4.679 * 0.0391-0.327 * 0.7689
=-1.32

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $15 Mil.
Revenue was 352.991 + 332.545 + 341.207 + 397.593 = $1,424 Mil.
Gross Profit was 67.058 + 62.625 + 63.996 + 71.735 = $265 Mil.
Total Current Assets was $184 Mil.
Total Assets was $298 Mil.
Property, Plant and Equipment(Net PPE) was $48 Mil.
Depreciation, Depletion and Amortization(DDA) was $16 Mil.
Selling, General & Admin. Expense(SGA) was $213 Mil.
Total Current Liabilities was $166 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1.617 + 1.909 + 3.97 + 73.581 = $81 Mil.
Non Operating Income was -0.35 + 0.524 + 0.459 + -0.595 = $0 Mil.
Cash Flow from Operations was 28.803 + 0.38 + -29.679 + 69.861 = $69 Mil.
Accounts Receivable was $15 Mil.
Revenue was 301.426 + 293.204 + 311.994 + 342.034 = $1,249 Mil.
Gross Profit was 59.15 + 57.839 + 58.936 + 61.211 = $237 Mil.
Total Current Assets was $139 Mil.
Total Assets was $179 Mil.
Property, Plant and Equipment(Net PPE) was $27 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $225 Mil.
Total Current Liabilities was $130 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)
=(14.941 / 1424.336) / (14.672 / 1248.658)
=0.0104898 / 0.01175022
=0.8927

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)
=(62.625 / 1248.658) / (67.058 / 1424.336)
=0.18991269 / 0.18634227
=1.0192

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 - (184.143 + 47.622) / 298.37) / (1 - (139.035 + 26.892) / 179.438)
=0.22322955 / 0.0752962
=2.9647

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
=1424.336 / 1248.658
=1.1407

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))
=(14.907 / (14.907 + 26.892)) / (16.495 / (16.495 + 47.622))
=0.35663533 / 0.25726406
=1.3863

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)
=(213.023 / 1424.336) / (225.419 / 1248.658)
=0.14955951 / 0.18052902
=0.8285

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)
=((0 + 166.162) / 298.37) / ((0 + 129.955) / 179.438)
=0.55689915 / 0.72423344
=0.7689

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
=(81.077 - 0.038 - 69.365) / 298.37
=0.0391

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 -1.32 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Jun13
DSRI 0.27111.08511.17780.99850.58031.55170.93720.56862.47811
GMI 0.8060.91581.21560.71670.96550.9251.07991.02430.94111
AQI 0.47585.87550.84820.39160.60120.89211.17471.46160.96831.1287
SGI 2.07011.6160.9860.96451.09171.05651.24310.96731.04270
DEPI 1.15971.10870.52940.70371.08631.25231.11780.87680.90791.147
SGAI 0.92190.96361.08350.8580.91211.01910.9011.14511.37811
LVGI 1.32921.31921.06061.19781.08140.66751.19931.15710.89710.9043
TATA -0.0782-0.0727-0.2969-0.2366-0.0884-0.1924-0.0207-0.2527-0.0943-0.3596
M-score -2.95-0.35-3.75-4.09-3.38-2.77-2.34-3.98-1.61-4.95

Overstock.com Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.57441.68762.47811.21451.26950.89790.70180.86080.93890.8927
GMI 1.02190.98140.94110.91930.91280.92440.95060.96380.99531.0192
AQI 1.10341.10590.96831.05920.95412.1328.42557.37498.29542.9647
SGI 0.96430.98371.04271.0931.13911.16551.18641.16061.14151.1407
DEPI 0.90020.9340.90791.08781.08931.13991.24141.25561.251.3863
SGAI 1.03871.0251.37811.39061.41511.57630.88490.90540.90060.8285
LVGI 1.01931.07080.89710.87430.86350.85860.74190.71010.70480.7689
TATA -0.2054-0.1811-0.0943-0.1978-0.242-0.18520.01590.10440.11430.0391
M-score -2.92-2.71-1.61-3.16-3.32-2.910.590.721.21-1.32
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