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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-3.41 (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 -3.41 suggests that the company is not a manipulator.

OSTK' s 10-Year Beneish M-Score Range
Min: -6.1   Max: 1.17
Current: -3.41

-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 * 0.8479+0.528 * 1.014+0.404 * 0.8709+0.892 * 1.1656+0.115 * 1.1465
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9954+4.679 * -0.1908-0.327 * 1.0661
=-3.41

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $16 Mil.
Revenue was 398.344 + 470.36 + 352.991 + 332.545 = $1,554 Mil.
Gross Profit was 75.437 + 85.38 + 67.058 + 62.625 = $291 Mil.
Total Current Assets was $195 Mil.
Total Assets was $320 Mil.
Property, Plant and Equipment(Net PPE) was $55 Mil.
Depreciation, Depletion and Amortization(DDA) was $20 Mil.
Selling, General & Admin. Expense(SGA) was $191 Mil.
Total Current Liabilities was $184 Mil.
Long-Term Debt was $0 Mil.
Net Income was 2.739 + 1.358 + 1.617 + 1.909 = $8 Mil.
Non Operating Income was 0.605 + 0.536 + -0.35 + 0.524 = $1 Mil.
Cash Flow from Operations was -43.089 + 81.33 + 28.803 + 0.38 = $67 Mil.
Accounts Receivable was $16 Mil.
Revenue was 341.207 + 397.593 + 301.426 + 293.204 = $1,333 Mil.
Gross Profit was 63.996 + 71.735 + 59.15 + 57.839 = $253 Mil.
Total Current Assets was $176 Mil.
Total Assets was $281 Mil.
Property, Plant and Equipment(Net PPE) was $33 Mil.
Depreciation, Depletion and Amortization(DDA) was $14 Mil.
Selling, General & Admin. Expense(SGA) was $165 Mil.
Total Current Liabilities was $151 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)
=(15.651 / 1554.24) / (15.836 / 1333.43)
=0.01006987 / 0.01187614
=0.8479

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)
=(85.38 / 1333.43) / (75.437 / 1554.24)
=0.18952626 / 0.18690807
=1.014

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 - (195.066 + 54.947) / 320.398) / (1 - (176.39 + 33.417) / 280.578)
=0.2196799 / 0.25223289
=0.8709

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
=1554.24 / 1333.43
=1.1656

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))
=(14.454 / (14.454 + 33.417)) / (19.645 / (19.645 + 54.947))
=0.30193645 / 0.26336604
=1.1465

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)
=(191.056 / 1554.24) / (164.673 / 1333.43)
=0.12292567 / 0.1234958
=0.9954

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 + 183.733) / 320.398) / ((0 + 150.916) / 280.578)
=0.57345239 / 0.53787539
=1.0661

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
=(7.623 - 1.315 - 67.424) / 320.398
=-0.1908

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 -3.41 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 2.47811.21451.26950.89790.4350.86080.93890.89270.94430.8479
GMI 0.94110.91930.91280.92440.95060.96380.99531.01921.01871.014
AQI 0.96831.05920.95412.1328.08767.37498.29542.96470.80490.8709
SGI 1.04271.0931.13911.16551.18641.16061.14151.14071.14791.1656
DEPI 0.90791.08781.08931.13991.24141.25561.251.38631.35161.1465
SGAI 1.37811.39061.41511.45560.72330.74410.74290.72590.98820.9954
LVGI 0.89710.87430.86350.85860.75160.71010.70480.76891.05051.0661
TATA -0.0943-0.1978-0.242-0.18520.00310.08960.09940.0253-0.1941-0.1908
M-score -1.61-3.16-3.32-2.890.170.681.17-1.36-3.35-3.41
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