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Barnes & Noble Inc  (NYSE:BKS) Beneish M-Score: -3.03 (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.

Barnes & Noble Inc has a M-score of -3.03 suggests that the company is not a manipulator.

NYSE:BKS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.38   Max: -0.46
Current: -3.03

-3.38
-0.46

During the past 13 years, the highest Beneish M-Score of Barnes & Noble Inc was -0.46. The lowest was -3.38. And the median was -2.71.


Historical Data

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

* Premium members only.

Barnes & Noble Inc Annual Data

Jan08 Jan09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Apr17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.95 -3.17 -2.87 -2.94 -2.95

Barnes & Noble Inc Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.97 -2.90 -2.66 -2.95 -3.03

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Barnes & Noble 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 * 0.6691+0.528 * 1.0271+0.404 * 1.0444+0.892 * 0.9353+0.115 * 1.0671
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.925+4.679 * -0.0541-0.327 * 0.9666
=-3.03

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

This Year (Jul17) TTM:Last Year (Jul16) TTM:
Accounts Receivable was $64 Mil.
Revenue was 853.316 + 821.22 + 1300.908 + 858.548 = $3,834 Mil.
Gross Profit was 253.481 + 242.487 + 436.801 + 255.375 = $1,188 Mil.
Total Current Assets was $1,137 Mil.
Total Assets was $1,935 Mil.
Property, Plant and Equipment(Net PPE) was $270 Mil.
Depreciation, Depletion and Amortization(DDA) was $115 Mil.
Selling, General, & Admin. Expense(SGA) was $1,014 Mil.
Total Current Liabilities was $1,115 Mil.
Long-Term Debt & Capital Lease Obligation was $84 Mil.
Net Income was -10.778 + -13.428 + 70.276 + -20.409 = $26 Mil.
Non-Recurring Items was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 12.822 + -13.18 + 210.173 + -79.38 = $130 Mil.
Accounts Receivable was $102 Mil.
Revenue was 913.882 + 876.684 + 1413.947 + 894.654 = $4,099 Mil.
Gross Profit was 277.539 + 265.758 + 491.655 + 269.786 = $1,305 Mil.
Total Current Assets was $1,223 Mil.
Total Assets was $2,048 Mil.
Property, Plant and Equipment(Net PPE) was $290 Mil.
(DDA) was $136 Mil.
Selling, General, & Admin. Expense(SGA) was $1,173 Mil.
Total Current Liabilities was $1,248 Mil.
Long-Term Debt & Capital Lease Obligation was $65 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(64.016 / 3833.992) / (102.289 / 4099.167)
=0.01669696 / 0.02495361
=0.6691

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)
=(1304.738 / 4099.167) / (1188.144 / 3833.992)
=0.31829345 / 0.30989736
=1.0271

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1136.966 + 270.471) / 1935.358) / (1 - (1223.328 + 289.907) / 2048.154)
=0.27277692 / 0.26117128
=1.0444

4. SGI = Sales Growth Index

Ratio of Revenue 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
=3833.992 / 4099.167
=0.9353

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(135.636 / (135.636 + 289.907)) / (115.202 / (115.202 + 270.471))
=0.3187363 / 0.29870382
=1.0671

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(1014.411 / 3833.992) / (1172.539 / 4099.167)
=0.26458349 / 0.28604324
=0.925

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)
=((84.1 + 1114.591) / 1935.358) / ((64.6 + 1247.83) / 2048.154)
=0.61936396 / 0.64078678
=0.9666

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
=(25.661 - 0 - 130.435) / 1935.358
=-0.0541

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.

Barnes & Noble Inc has a M-score of -3.03 suggests that the company will not be a manipulator.


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