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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-2.76 (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 -2.81 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: -2.76

-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 * 0.9806+0.528 * 1.0005+0.404 * 1.3673+0.892 * 1.157+0.115 * 1.1355
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0399+4.679 * -0.1335-0.327 * 0.953
=-2.81

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was -2.071 + 1.668 + 2.739 + 1.358 = $4 Mil.
Non Operating Income was 0.764 + 1.163 + 0.605 + 0.536 = $3 Mil.
Cash Flow from Operations was 11.467 + -4.778 + -43.089 + 81.33 = $45 Mil.
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 $172 Mil.
Total Current Liabilities was $166 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)
=(16.951 / 1647.928) / (14.941 / 1424.336)
=0.01028625 / 0.0104898
=0.9806

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)
=(73.657 / 1424.336) / (72.451 / 1647.928)
=0.18634227 / 0.18624904
=1.0005

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 - (151.727 + 78.807) / 331.806) / (1 - (184.143 + 47.622) / 298.37)
=0.30521449 / 0.22322955
=1.3673

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
=1647.928 / 1424.336
=1.157

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))
=(16.495 / (16.495 + 47.622)) / (23.085 / (23.085 + 78.807))
=0.25726406 / 0.22656342
=1.1355

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)
=(207.385 / 1647.928) / (172.372 / 1424.336)
=0.12584591 / 0.1210192
=1.0399

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 + 176.089) / 331.806) / ((0 + 166.162) / 298.37)
=0.53069866 / 0.55689915
=0.953

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
=(3.694 - 3.068 - 44.93) / 331.806
=-0.1335

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 -2.81 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.26950.89790.4350.86080.93890.89270.94430.84790.86450.9806
GMI 0.91280.92440.95060.96380.99531.01921.01871.0141.00141.0005
AQI 0.95412.1328.08767.37498.29542.96470.80490.87090.86151.3673
SGI 1.13911.16551.18641.16061.14151.14071.14791.16561.17261.157
DEPI 1.08931.13991.24141.25561.251.38631.35161.14651.24031.1355
SGAI 1.41511.45560.72330.74410.74290.72590.98820.99541.00911.0399
LVGI 0.86350.85860.75160.71010.70480.76891.05051.06611.08890.953
TATA -0.242-0.18520.00310.08960.09940.0253-0.1941-0.1908-0.1772-0.1335
M-score -3.32-2.890.170.681.17-1.36-3.35-3.41-3.34-2.81
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