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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.87 (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 -2.87 suggests that the company is not a manipulator.

LAMR' s 10-Year Beneish M-Score Range
Min: -3.4   Max: -1.38
Current: -2.87

-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 * 0.9724+0.528 * 0.9999+0.404 * 1.0433+0.892 * 1.0349+0.115 * 0.9988
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9636+4.679 * -0.0899-0.327 * 0.9854
=-2.87

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $181 Mil.
Revenue was 334.998 + 330.433 + 284.933 + 320.352 = $1,271 Mil.
Gross Profit was 222.61 + 216.156 + 173.425 + 210.39 = $823 Mil.
Total Current Assets was $315 Mil.
Total Assets was $3,370 Mil.
Property, Plant and Equipment(Net PPE) was $1,095 Mil.
Depreciation, Depletion and Amortization(DDA) was $284 Mil.
Selling, General & Admin. Expense(SGA) was $288 Mil.
Total Current Liabilities was $225 Mil.
Long-Term Debt was $1,925 Mil.
Net Income was 35.05 + 15.422 + -4.837 + 10.186 = $56 Mil.
Non Operating Income was 0 + -20.847 + -9.245 + -14.345 = $-44 Mil.
Cash Flow from Operations was 129.772 + 110.848 + 62.584 + 100.021 = $403 Mil.
Accounts Receivable was $179 Mil.
Revenue was 321.141 + 327.744 + 276.605 + 302.34 = $1,228 Mil.
Gross Profit was 211.501 + 217.021 + 170.086 + 196.141 = $795 Mil.
Total Current Assets was $462 Mil.
Total Assets was $3,625 Mil.
Property, Plant and Equipment(Net PPE) was $1,143 Mil.
Depreciation, Depletion and Amortization(DDA) was $296 Mil.
Selling, General & Admin. Expense(SGA) was $289 Mil.
Total Current Liabilities was $599 Mil.
Long-Term Debt was $1,749 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)
=(180.584 / 1270.716) / (179.434 / 1227.83)
=0.14211201 / 0.14613912
=0.9724

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)
=(216.156 / 1227.83) / (222.61 / 1270.716)
=0.64727935 / 0.64733662
=0.9999

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 - (314.876 + 1095.363) / 3369.76) / (1 - (461.682 + 1143.075) / 3625.422)
=0.58150165 / 0.55735994
=1.0433

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
=1270.716 / 1227.83
=1.0349

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))
=(296.292 / (296.292 + 1143.075)) / (284.337 / (284.337 + 1095.363))
=0.20584882 / 0.20608611
=0.9988

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)
=(287.913 / 1270.716) / (288.704 / 1227.83)
=0.22657541 / 0.23513353
=0.9636

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)
=((1925.476 + 224.8) / 3369.76) / ((1748.98 + 598.655) / 3625.422)
=0.63810954 / 0.64754806
=0.9854

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
=(55.821 - -44.437 - 403.225) / 3369.76
=-0.0899

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 -2.87 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.89061.1281.0141.06941.06231.04310.95771.00651.04160.9583
GMI 0.9721.00561.00470.98331.04341.01830.98140.99390.99050.9936
AQI 0.99360.99640.96480.94650.99541.00141.03761.0111.00261.0154
SGI 1.09061.15641.09631.07990.99080.88121.03431.03771.04081.056
DEPI 0.94341.03171.03331.06370.97750.89140.96970.99251.00060.9491
SGAI 1.00680.97691.06741.00580.96161.01061.03890.97331.02041.0343
LVGI 0.9730.94961.19391.311.02151.0010.98090.95870.99410.9368
TATA -0.0843-0.0809-0.0845-0.0793-0.0841-0.0904-0.0947-0.0903-0.0929-0.1
M-score -2.91-2.58-2.86-2.84-2.81-2.97-2.93-2.84-2.85-2.92

Lamar Advertising Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.92380.98451.04161.04951.06161.0340.95830.97351.00150.9724
GMI 0.99420.99080.99050.98990.98970.99410.99360.99691.00330.9999
AQI 0.97961.00711.00260.99591.00430.96961.01541.00771.0231.0433
SGI 1.04111.03991.04081.03981.04921.05341.0561.05381.03621.0349
DEPI 0.96160.96011.00060.99741.00011.00140.94910.96360.96830.9988
SGAI 0.99171.00141.02041.05571.04161.0511.03430.97450.97370.9636
LVGI 0.98130.96530.99410.96930.96550.98260.93680.94860.97380.9854
TATA -0.0897-0.0909-0.0929-0.1022-0.0991-0.1027-0.1-0.0982-0.0989-0.0899
M-score -2.94-2.88-2.85-2.88-2.84-2.90-2.92-2.90-2.89-2.87
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