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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

LAMR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.32   Max: -1.82
Current: -2.71

-3.32
-1.82

During the past 13 years, the highest Beneish M-Score of Lamar Advertising Co was -1.82. The lowest was -3.32. And the median was -2.83.


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 * 0.9778+0.528 * 0.9967+0.404 * 1.0049+0.892 * 1.0515+0.115 * 1.2942
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9956+4.679 * -0.0634-0.327 * 0.9925
=-2.71

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $174 Mil.
Revenue was 355.969 + 350.701 + 344.249 + 302.477 = $1,353 Mil.
Gross Profit was 233.068 + 229.025 + 228.298 + 189.245 = $880 Mil.
Total Current Assets was $282 Mil.
Total Assets was $3,392 Mil.
Property, Plant and Equipment(Net PPE) was $1,095 Mil.
Depreciation, Depletion and Amortization(DDA) was $191 Mil.
Selling, General & Admin. Expense(SGA) was $314 Mil.
Total Current Liabilities was $242 Mil.
Long-Term Debt was $1,898 Mil.
Net Income was 76.529 + 85.965 + 59.36 + 40.716 = $263 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 164.18 + 125.253 + 133.486 + 54.731 = $478 Mil.
Accounts Receivable was $170 Mil.
Revenue was 336.696 + 334.998 + 330.433 + 284.933 = $1,287 Mil.
Gross Profit was 221.6 + 222.61 + 216.156 + 173.425 = $834 Mil.
Total Current Assets was $273 Mil.
Total Assets was $3,319 Mil.
Property, Plant and Equipment(Net PPE) was $1,084 Mil.
Depreciation, Depletion and Amortization(DDA) was $258 Mil.
Selling, General & Admin. Expense(SGA) was $300 Mil.
Total Current Liabilities was $225 Mil.
Long-Term Debt was $1,884 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)
=(174.398 / 1353.396) / (169.61 / 1287.06)
=0.12885955 / 0.13178096
=0.9778

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)
=(229.025 / 1287.06) / (233.068 / 1353.396)
=0.64782605 / 0.64994724
=0.9967

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 - (281.732 + 1095.137) / 3391.778) / (1 - (273.144 + 1083.64) / 3318.818)
=0.59405686 / 0.59118457
=1.0049

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
=1353.396 / 1287.06
=1.0515

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))
=(258.435 / (258.435 + 1083.64)) / (191.433 / (191.433 + 1095.137))
=0.19256375 / 0.1487933
=1.2942

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)
=(313.941 / 1353.396) / (299.878 / 1287.06)
=0.23196537 / 0.23299458
=0.9956

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)
=((1898.152 + 241.653) / 3391.778) / ((1884.27 + 225.341) / 3318.818)
=0.63088003 / 0.63565131
=0.9925

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
=(262.57 - 0 - 477.65) / 3391.778
=-0.0634

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 -2.71 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0141.06941.06231.04310.95771.00651.03880.96081.01510.9778
GMI 1.00470.98331.04191.01980.98140.99390.98910.99511.00240.9967
AQI 0.96480.94650.99541.00141.03761.0111.00261.01541.00671.0049
SGI 1.09631.07990.99080.88121.03431.03771.04361.05321.03311.0515
DEPI 1.03331.05060.98960.89140.96970.99251.00060.94911.09731.2942
SGAI 1.06741.00580.96161.01061.03890.97331.01761.0371.00520.9956
LVGI 1.19391.311.02151.0010.98090.95870.99410.93681.0160.9925
TATA -0.0817-0.0793-0.0822-0.0904-0.0947-0.0903-0.0923-0.1-0.0509-0.0634
M-score -2.85-2.84-2.80-2.97-2.93-2.84-2.84-2.92-2.67-2.71

Lamar Advertising Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.03150.95830.97351.00150.97241.01510.99850.94760.990.9778
GMI 0.99280.99360.99691.00330.99991.00240.99460.98780.99480.9967
AQI 0.96961.01541.00771.0231.04331.00671.01391.01161.01011.0049
SGI 1.05591.0561.05381.03621.03491.03311.04021.0491.04991.0515
DEPI 1.00140.94910.96360.96830.99881.09731.17111.27881.33051.2942
SGAI 1.04851.03430.97450.97370.96361.00521.02061.03271.02650.9956
LVGI 0.98260.93680.94860.97380.98541.0161.01891.0051.00060.9925
TATA -0.1027-0.1-0.0982-0.0989-0.0899-0.0509-0.0372-0.0369-0.0202-0.0634
M-score -2.90-2.92-2.90-2.89-2.87-2.67-2.61-2.63-2.50-2.71
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