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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-3.34 (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 -3.34 suggests that the company is not a manipulator.

OSTK' s 10-Year Beneish M-Score Range
Min: -6.1   Max: 1.17
Current: -3.34

-6.1
1.17

During the past 13 years, the highest Beneish M-Score of Overstock.com Inc was 1.17. The lowest was -6.10. And the median was -3.24.


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 * 0.8645+0.528 * 1.0014+0.404 * 0.8615+0.892 * 1.1726+0.115 * 1.2403
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0091+4.679 * -0.1772-0.327 * 1.0889
=-3.34

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $16 Mil.
Revenue was 388.013 + 398.344 + 470.36 + 352.991 = $1,610 Mil.
Gross Profit was 73.657 + 75.437 + 85.38 + 67.058 = $302 Mil.
Total Current Assets was $184 Mil.
Total Assets was $321 Mil.
Property, Plant and Equipment(Net PPE) was $66 Mil.
Depreciation, Depletion and Amortization(DDA) was $21 Mil.
Selling, General & Admin. Expense(SGA) was $199 Mil.
Total Current Liabilities was $182 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1.668 + 2.739 + 1.358 + 1.617 = $7 Mil.
Non Operating Income was 1.163 + 0.605 + 0.536 + -0.35 = $2 Mil.
Cash Flow from Operations was -4.778 + -43.089 + 81.33 + 28.803 = $62 Mil.
Accounts Receivable was $16 Mil.
Revenue was 332.545 + 341.207 + 397.593 + 301.426 = $1,373 Mil.
Gross Profit was 62.625 + 63.996 + 71.735 + 59.15 = $258 Mil.
Total Current Assets was $171 Mil.
Total Assets was $277 Mil.
Property, Plant and Equipment(Net PPE) was $35 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $168 Mil.
Total Current Liabilities was $144 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)
=(15.843 / 1609.708) / (15.628 / 1372.771)
=0.00984216 / 0.01138427
=0.8645

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)
=(75.437 / 1372.771) / (73.657 / 1609.708)
=0.18758118 / 0.18732093
=1.0014

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 - (184.434 + 65.956) / 320.77) / (1 - (171.1 + 35.002) / 276.529)
=0.21940955 / 0.25468215
=0.8615

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
=1609.708 / 1372.771
=1.1726

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))
=(15.101 / (15.101 + 35.002)) / (21.173 / (21.173 + 65.956))
=0.30139912 / 0.24300749
=1.2403

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)
=(199.148 / 1609.708) / (168.304 / 1372.771)
=0.12371685 / 0.12260166
=1.0091

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 + 181.648) / 320.77) / ((0 + 143.811) / 276.529)
=0.56628737 / 0.52005757
=1.0889

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
=(7.382 - 1.954 - 62.266) / 320.77
=-0.1772

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 -3.34 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.08511.17780.99850.58031.55170.93720.56862.47810.4350.9443
GMI 0.91581.21560.71670.96550.9251.07991.02430.94110.95061.0187
AQI 5.87550.84820.39160.60120.89211.17471.46160.96838.08760.8049
SGI 1.6160.9860.96451.09171.05651.24310.96731.04271.18641.1479
DEPI 1.10870.52940.70371.08631.25231.11780.87680.90791.24141.3516
SGAI 0.96361.08350.8580.91211.01910.9011.14511.37810.72330.9882
LVGI 1.31921.06061.19781.08140.66751.19931.15710.89710.75161.0505
TATA -0.0727-0.2969-0.2366-0.0884-0.1924-0.0207-0.2527-0.09430.0031-0.1941
M-score -0.35-3.75-4.09-3.38-2.77-2.34-3.98-1.610.17-3.35

Overstock.com Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.21451.26950.89790.4350.86080.93890.89270.94430.84790.8645
GMI 0.91930.91280.92440.95060.96380.99531.01921.01871.0141.0014
AQI 1.05920.95412.1328.08767.37498.29542.96470.80490.87090.8615
SGI 1.0931.13911.16551.18641.16061.14151.14071.14791.16561.1726
DEPI 1.08781.08931.13991.24141.25561.251.38631.35161.14651.2403
SGAI 1.39061.41511.45560.72330.74410.74290.72590.98820.99541.0091
LVGI 0.87430.86350.85860.75160.71010.70480.76891.05051.06611.0889
TATA -0.1978-0.242-0.18520.00310.08960.09940.0253-0.1941-0.1908-0.1772
M-score -3.16-3.32-2.890.170.681.17-1.36-3.35-3.41-3.34
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