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GuruFocus has detected 2 Warning Signs with BlueLinx Holdings Inc $BXC.
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BlueLinx Holdings Inc (NYSE:BXC)
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.

BlueLinx Holdings Inc has a M-score of -2.76 suggests that the company is not a manipulator.

BXC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.76   Max: -1.73
Current: -2.76

-4.76
-1.73

During the past 13 years, the highest Beneish M-Score of BlueLinx Holdings Inc was -1.73. The lowest was -4.76. And the median was -2.76.


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 BlueLinx Holdings 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 * 0.9302+0.528 * 0.9718+0.404 * 1.2761+0.892 * 0.948+0.115 * 0.9748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0579+4.679 * -0.0608-0.327 * 0.9085
=-2.76

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $160 Mil.
Revenue was 428.608 + 421.657 + 476.049 + 509.011 = $1,835 Mil.
Gross Profit was 54.434 + 52.374 + 60.05 + 57.387 = $224 Mil.
Total Current Assets was $398 Mil.
Total Assets was $498 Mil.
Property, Plant and Equipment(Net PPE) was $89 Mil.
Depreciation, Depletion and Amortization(DDA) was $9 Mil.
Selling, General & Admin. Expense(SGA) was $202 Mil.
Total Current Liabilities was $139 Mil.
Long-Term Debt was $316 Mil.
Net Income was 0.584 + 10.365 + 15.008 + -3.144 = $23 Mil.
Non Operating Income was 0 + 0 + 0.017 + -0.135 = $-0 Mil.
Cash Flow from Operations was -39.86 + 41.567 + 25.773 + 25.697 = $53 Mil.
Accounts Receivable was $182 Mil.
Revenue was 474.326 + 428.15 + 517.831 + 515.656 = $1,936 Mil.
Gross Profit was 57.596 + 51.47 + 60.824 + 59.983 = $230 Mil.
Total Current Assets was $460 Mil.
Total Assets was $568 Mil.
Property, Plant and Equipment(Net PPE) was $98 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $201 Mil.
Total Current Liabilities was $148 Mil.
Long-Term Debt was $424 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)
=(160.068 / 1835.325) / (181.507 / 1935.963)
=0.08721507 / 0.09375541
=0.9302

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)
=(229.873 / 1935.963) / (224.245 / 1835.325)
=0.11873832 / 0.12218272
=0.9718

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 - (398.182 + 88.745) / 497.692) / (1 - (460.286 + 98.288) / 568.205)
=0.02162984 / 0.01694987
=1.2761

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
=1835.325 / 1935.963
=0.948

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))
=(9.939 / (9.939 + 98.288)) / (9.23 / (9.23 + 88.745))
=0.09183475 / 0.09420771
=0.9748

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)
=(201.664 / 1835.325) / (201.082 / 1935.963)
=0.10987918 / 0.10386665
=1.0579

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)
=((315.624 + 139.133) / 497.692) / ((423.625 + 147.854) / 568.205)
=0.91373179 / 1.005762
=0.9085

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
=(22.813 - -0.118 - 53.177) / 497.692
=-0.0608

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.

BlueLinx Holdings Inc has a M-score of -2.76 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.

BlueLinx Holdings Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.09360.68471.54250.91121.19751.04330.84621.04550.990.9256
GMI 0.95790.90230.96551.00510.97530.99271.13580.91730.99710.9602
AQI 1.30072.36170.95021.23730.49910.65651.03670.89850.63061.2114
SGI 0.78250.7250.59221.09620.97291.08681.1280.91980.96830.9815
DEPI 1.07050.91391.07481.17871.1831.1430.91150.91840.94350.9147
SGAI 1.24841.12261.16870.96090.9660.95611.00920.93350.95841.0604
LVGI 1.00690.9911.05811.10770.96031.04061.00231.03261.02520.967
TATA -0.1224-0.3038-0.0611-0.05170.0210.094-0.0008-0.0023-0.0987-0.0576
M-score -3.10-3.97-2.71-2.63-2.40-2.05-2.44-2.61-3.14-2.78

BlueLinx Holdings Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.04550.97910.98220.94250.991.05050.94190.89750.92560.9302
GMI 0.91730.9431.0081.02180.99710.95890.96550.94730.96020.9718
AQI 0.89850.85260.75250.66390.63060.74771.05271.0671.21141.2761
SGI 0.91980.95110.97770.96570.96830.97270.97710.97170.98150.948
DEPI 0.91840.95050.97321.01810.94350.88940.83440.84440.91470.9748
SGAI 0.93350.92240.93220.91960.95840.98831.01231.04591.06041.0579
LVGI 1.03261.02821.02971.03031.02521.02191.03080.99870.9670.9085
TATA -0.0023-0.0166-0.0381-0.0424-0.0987-0.0607-0.1411-0.1367-0.0576-0.0608
M-score -2.61-2.71-2.79-2.88-3.14-2.88-3.24-3.27-2.78-2.76
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