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Overstock.com Inc (NAS:OSTK)
Beneish M-Score
-3.35 (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 -3.35 suggests that the company is not a manipulator.

OSTK' s 10-Year Beneish M-Score Range
Min: -4.56   Max: 0.17
Current: -3.35

-4.56
0.17

During the past 13 years, the highest Beneish M-Score of Overstock.com Inc was 0.17. The lowest was -4.56. And the median was -3.35.


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 * 0.9443+0.528 * 1.0187+0.404 * 0.8049+0.892 * 1.1479+0.115 * 1.3516
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9882+4.679 * -0.1941-0.327 * 1.0505
=-3.35

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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.
Net Income was 1.358 + 1.617 + 1.909 + 3.97 = $9 Mil.
Non Operating Income was 0.536 + -0.35 + 0.524 + 0.459 = $1 Mil.
Cash Flow from Operations was 81.33 + 28.803 + 0.38 + -29.679 = $81 Mil.
Accounts Receivable was $10 Mil.
Revenue was 397.593 + 301.426 + 293.204 + 311.994 = $1,304 Mil.
Gross Profit was 71.735 + 59.15 + 57.839 + 58.936 = $248 Mil.
Total Current Assets was $219 Mil.
Total Assets was $316 Mil.
Property, Plant and Equipment(Net PPE) was $27 Mil.
Depreciation, Depletion and Amortization(DDA) was $15 Mil.
Selling, General & Admin. Expense(SGA) was $160 Mil.
Total Current Liabilities was $194 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)
=(10.781 / 1497.103) / (9.946 / 1304.217)
=0.00720124 / 0.00762603
=0.9443

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)
=(67.058 / 1304.217) / (85.38 / 1497.103)
=0.18989171 / 0.18639933
=1.0187

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 - (258.062 + 52.071) / 376.865) / (1 - (219.007 + 27.194) / 315.636)
=0.17707137 / 0.21998441
=0.8049

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
=1497.103 / 1304.217
=1.1479

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))
=(14.522 / (14.522 + 27.194)) / (18.064 / (18.064 + 52.071))
=0.34811583 / 0.25756042
=1.3516

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)
=(181.238 / 1497.103) / (159.778 / 1304.217)
=0.12105914 / 0.12250875
=0.9882

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 + 242.802) / 376.865) / ((0 + 193.582) / 315.636)
=0.64426784 / 0.61330773
=1.0505

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
=(8.854 - 1.169 - 80.834) / 376.865
=-0.1941

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 -3.35 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.68762.47811.21451.26950.89790.4350.86080.93890.89270.9443
GMI 0.98140.94110.91930.91280.92440.95060.96380.99531.01921.0187
AQI 1.10590.96831.05920.95412.1328.08767.37498.29542.96470.8049
SGI 0.98371.04271.0931.13911.16551.18641.16061.14151.14071.1479
DEPI 0.9340.90791.08781.08931.13991.24141.25561.251.38631.3516
SGAI 1.0251.37811.39061.41511.45560.72330.74410.74290.72590.9882
LVGI 1.07080.89710.87430.86350.85860.75160.71010.70480.76891.0505
TATA -0.1811-0.0943-0.1978-0.242-0.18520.00310.08960.09940.0253-0.1941
M-score -2.71-1.61-3.16-3.32-2.890.170.681.17-1.36-3.35
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