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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.
During the past 13 years, the highest Beneish M-Score of Big Lots Inc was 5.89. The lowest was -3.99. And the median was -2.72.
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 * 1.0238||+||0.404 * 0.7732||+||0.892 * 1.0113||+||0.115 * 0.9285|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0421||+||4.679 * -0.1171||-||0.327 * 1.0228|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Oct14) TTM:||Last Year (Oct13) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 1107.095 + 1195.363 + 1281.271 + 1749.069 = $5,333 Mil.
Gross Profit was 430.942 + 469.527 + 493.556 + 667.568 = $2,062 Mil.
Total Current Assets was $1,313 Mil.
Total Assets was $1,934 Mil.
Property, Plant and Equipment(Net PPE) was $567 Mil.
Depreciation, Depletion and Amortization(DDA) was $105 Mil.
Selling, General & Admin. Expense(SGA) was $1,775 Mil.
Total Current Liabilities was $756 Mil.
Long-Term Debt was $283 Mil.
Net Income was -3.441 + 19.938 + 3.348 + 84.353 = $104 Mil.
Non Operating Income was 0 + 0 + 0 + -1.202 = $-1 Mil.
Cash Flow from Operations was -94.791 + 55.003 + 102.166 + 269.432 = $332 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 1104.918 + 1180.905 + 1267.02 + 1720.442 = $5,273 Mil.
Gross Profit was 431.428 + 464.115 + 502.195 + 689.455 = $2,087 Mil.
Total Current Assets was $1,466 Mil.
Total Assets was $2,135 Mil.
Property, Plant and Equipment(Net PPE) was $591 Mil.
Depreciation, Depletion and Amortization(DDA) was $100 Mil.
Selling, General & Admin. Expense(SGA) was $1,684 Mil.
Total Current Liabilities was $798 Mil.
Long-Term Debt was $324 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0 / 5332.798)||/||(0 / 5273.285)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(469.527 / 5273.285)||/||(430.942 / 5332.798)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1312.722 + 566.889) / 1933.911)||/||(1 - (1465.914 + 591.314) / 2134.746)|
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.
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))|
|=||(100.377 / (100.377 + 591.314))||/||(105.017 / (105.017 + 566.889))|
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)|
|=||(1774.896 / 5332.798)||/||(1684.199 / 5273.285)|
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)|
|=||((283.4 + 756.324) / 1933.911)||/||((324 + 798.144) / 2134.746)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(104.198 - -1.202||-||331.81)||/||1933.911|
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 -3.12 suggests that the company will not be a manipulator.
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
Big Lots Inc Annual Data
Big Lots Inc Quarterly Data