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GuruFocus has detected 4 Warning Signs with Big Lots Inc $BIG.
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Big Lots Inc (NYSE:BIG)
Beneish M-Score
-2.97 (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.

Big Lots Inc has a M-score of -2.97 suggests that the company is not a manipulator.

BIG' s Beneish M-Score Range Over the Past 10 Years
Min: -4   Max: 5.82
Current: -2.97

-4
5.82

During the past 13 years, the highest Beneish M-Score of Big Lots Inc was 5.82. The lowest was -4.00. And the median was -2.72.


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 Big Lots 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 * 1+0.528 * 0.9808+0.404 * 0.9285+0.892 * 0.9927+0.115 * 0.9436
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0119+4.679 * -0.0958-0.327 * 0.9539
=-2.97

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1296.787 + 1579.211 + 1105.498 + 1203.155 = $5,185 Mil.
Gross Profit was 524.275 + 653.323 + 441.992 + 486.423 = $2,106 Mil.
Total Current Assets was $990 Mil.
Total Assets was $1,600 Mil.
Property, Plant and Equipment(Net PPE) was $519 Mil.
Depreciation, Depletion and Amortization(DDA) was $108 Mil.
Selling, General & Admin. Expense(SGA) was $1,722 Mil.
Total Current Liabilities was $652 Mil.
Long-Term Debt was $116 Mil.
Net Income was 51.512 + 90.078 + 1.376 + 22.715 = $166 Mil.
Non Operating Income was -0.517 + 0.359 + 0.698 + -0.377 = $0 Mil.
Cash Flow from Operations was 85.454 + 268.389 + -67.964 + 32.889 = $319 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1312.575 + 1583.967 + 1116.474 + 1209.686 = $5,223 Mil.
Gross Profit was 517.681 + 647.229 + 440.007 + 475.834 = $2,081 Mil.
Total Current Assets was $956 Mil.
Total Assets was $1,607 Mil.
Property, Plant and Equipment(Net PPE) was $552 Mil.
Depreciation, Depletion and Amortization(DDA) was $107 Mil.
Selling, General & Admin. Expense(SGA) was $1,714 Mil.
Total Current Liabilities was $655 Mil.
Long-Term Debt was $154 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)
=(0 / 5184.651) / (0 / 5222.702)
=0 / 0
=1

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)
=(2080.751 / 5222.702) / (2106.013 / 5184.651)
=0.39840508 / 0.4062015
=0.9808

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 - (990.135 + 518.82) / 1599.715) / (1 - (956.165 + 552.289) / 1606.621)
=0.05673511 / 0.06110153
=0.9285

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
=5184.651 / 5222.702
=0.9927

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))
=(106.78 / (106.78 + 552.289)) / (107.554 / (107.554 + 518.82))
=0.16201642 / 0.17170892
=0.9436

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)
=(1721.566 / 5184.651) / (1713.874 / 5222.702)
=0.33205051 / 0.32815849
=1.0119

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)
=((115.7 + 652.311) / 1599.715) / ((153.8 + 654.801) / 1606.621)
=0.48009239 / 0.50329294
=0.9539

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
=(165.681 - 0.163 - 318.768) / 1599.715
=-0.0958

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.

Big Lots Inc has a M-score of -2.97 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 local exchange's currency.

Big Lots Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 1111111111
GMI 1.0090.98850.98470.99921.01621.01441.00740.99110.99130.9865
AQI 1.29131.01090.66280.80151.42111.05010.70931.87320.99671.0377
SGI 0.98170.99761.01751.04771.04181.01030.99181.00151.00261.0019
DEPI 1.08011.1251.031.02780.97820.9110.9120.94330.99690.9471
SGAI 0.95151.0080.98820.9820.9920.99621.03451.00881.00271.0111
LVGI 1.66860.78180.90371.02971.18491.15190.82381.05611.13661.0813
TATA -0.1035-0.0415-0.1148-0.0574-0.0678-0.0593-0.0419-0.1249-0.1184-0.0999
M-score -3.06-2.59-3.11-2.79-2.64-2.78-2.76-2.74-3.08-2.97

Big Lots Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
DSRI 1111111111
GMI 0.99110.97890.97950.97630.99130.99620.99030.98980.98650.9808
AQI 1.87321.16131.03530.85690.99671.66921.8452.21051.03770.9285
SGI 1.00150.99861.00721.00861.00261.0091.00491.0011.00190.9927
DEPI 0.94330.97051.00780.9850.99690.99050.95280.9480.94710.9436
SGAI 1.00881.01121.00761.01081.00270.99781.00191.00031.01111.0119
LVGI 1.05611.02021.24731.04721.13661.27121.13161.0861.08130.9539
TATA -0.1249-0.0975-0.0814-0.0865-0.1184-0.1118-0.1106-0.0945-0.0999-0.0958
M-score -2.74-2.90-2.93-2.97-3.08-2.82-2.71-2.47-2.97-2.97
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