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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.61 (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.

Lamar Advertising Co has a M-score of -2.61 suggests that the company is not a manipulator.

LAMR' s 10-Year Beneish M-Score Range
Min: -3.4   Max: -1.38
Current: -2.61

-3.4
-1.38

During the past 13 years, the highest Beneish M-Score of Lamar Advertising Co was -1.38. The lowest was -3.40. And the median was -2.84.


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 Lamar Advertising Co 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 * 0.9985+0.528 * 0.9946+0.404 * 1.0139+0.892 * 1.0402+0.115 * 1.1711
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0206+4.679 * -0.0372-0.327 * 1.0189
=-2.61

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $169 Mil.
Revenue was 302.477 + 336.696 + 334.998 + 330.433 = $1,305 Mil.
Gross Profit was 189.245 + 221.6 + 222.61 + 216.156 = $850 Mil.
Total Current Assets was $310 Mil.
Total Assets was $3,355 Mil.
Property, Plant and Equipment(Net PPE) was $1,082 Mil.
Depreciation, Depletion and Amortization(DDA) was $238 Mil.
Selling, General & Admin. Expense(SGA) was $302 Mil.
Total Current Liabilities was $206 Mil.
Long-Term Debt was $1,938 Mil.
Net Income was 40.716 + 207.883 + 35.05 + 15.422 = $299 Mil.
Non Operating Income was 0 + 0 + 0 + -20.847 = $-21 Mil.
Cash Flow from Operations was 54.731 + 149.325 + 129.772 + 110.848 = $445 Mil.
Accounts Receivable was $162 Mil.
Revenue was 284.933 + 320.352 + 321.141 + 327.744 = $1,254 Mil.
Gross Profit was 173.425 + 210.39 + 211.501 + 217.021 = $812 Mil.
Total Current Assets was $343 Mil.
Total Assets was $3,427 Mil.
Property, Plant and Equipment(Net PPE) was $1,106 Mil.
Depreciation, Depletion and Amortization(DDA) was $296 Mil.
Selling, General & Admin. Expense(SGA) was $284 Mil.
Total Current Liabilities was $203 Mil.
Long-Term Debt was $1,946 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)
=(168.527 / 1304.604) / (162.26 / 1254.17)
=0.12917866 / 0.1293764
=0.9985

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)
=(221.6 / 1254.17) / (189.245 / 1304.604)
=0.64770884 / 0.65124053
=0.9946

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 - (309.852 + 1081.666) / 3355.224) / (1 - (343.117 + 1105.505) / 3426.578)
=0.58526823 / 0.57723945
=1.0139

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
=1304.604 / 1254.17
=1.0402

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))
=(296.204 / (296.204 + 1105.505)) / (238.139 / (238.139 + 1081.666))
=0.21131633 / 0.18043499
=1.1711

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)
=(301.514 / 1304.604) / (284.011 / 1254.17)
=0.23111534 / 0.22645335
=1.0206

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)
=((1937.515 + 206.144) / 3355.224) / ((1945.985 + 202.614) / 3426.578)
=0.6389019 / 0.62703928
=1.0189

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
=(299.071 - -20.847 - 444.676) / 3355.224
=-0.0372

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.

Lamar Advertising Co has a M-score of -2.61 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.

Lamar Advertising Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.1281.0141.06941.06231.04310.95771.00651.04160.95831.0151
GMI 1.00561.00470.98331.04341.01830.98140.99390.99050.99361.0024
AQI 0.99640.96480.94650.99541.00141.03761.0111.00261.01541.0067
SGI 1.15641.09631.07990.99080.88121.03431.03771.04081.0561.0331
DEPI 1.03171.03331.06370.97750.89140.96970.99251.00060.94911.0973
SGAI 0.97691.06741.00580.96161.01061.03890.97331.02041.03431.0052
LVGI 0.94961.19391.311.02151.0010.98090.95870.99410.93681.016
TATA -0.0809-0.0845-0.0793-0.0841-0.0904-0.0947-0.0903-0.0929-0.1-0.0509
M-score -2.58-2.86-2.84-2.81-2.97-2.93-2.84-2.85-2.92-2.67

Lamar Advertising Co Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.04161.04951.06161.0340.95830.97351.00150.97241.01510.9985
GMI 0.99050.98990.98970.99410.99360.99691.00330.99991.00240.9946
AQI 1.00260.99591.00430.96961.01541.00771.0231.04331.00671.0139
SGI 1.04081.03981.04921.05341.0561.05381.03621.03491.03311.0402
DEPI 1.00060.99741.00011.00140.94910.96360.96830.99881.09731.1711
SGAI 1.02041.05571.04161.0511.03430.97450.97370.96361.00521.0206
LVGI 0.99410.96930.96550.98260.93680.94860.97380.98541.0161.0189
TATA -0.0929-0.1022-0.0991-0.1027-0.1-0.0982-0.0989-0.0899-0.0509-0.0372
M-score -2.85-2.88-2.84-2.90-2.92-2.90-2.89-2.87-2.67-2.61
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