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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.62 (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 -2.72 suggests that the company is not a manipulator.

LAMR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.4   Max: -1.38
Current: -2.62

-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 -2.82.


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 * 0.9991+0.892 * 1.0515+0.115 * 1.2942
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9956+4.679 * -0.0639-0.327 * 0.9877
=-2.72

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $174 Mil.
Revenue was $1,353 Mil.
Gross Profit was $880 Mil.
Total Current Assets was $282 Mil.
Total Assets was $3,364 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 $237 Mil.
Long-Term Debt was $1,875 Mil.
Net Income was $263 Mil.
Non Operating Income was $0 Mil.
Cash Flow from Operations was $478 Mil.
Accounts Receivable was $170 Mil.
Revenue was $1,287 Mil.
Gross Profit was $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)
=(833.791 / 1287.06) / (879.636 / 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) / 3363.744) / (1 - (273.144 + 1083.64) / 3318.818)
=0.59067367 / 0.59118457
=0.9991

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)
=((1874.941 + 236.83) / 3363.744) / ((1884.27 + 225.341) / 3318.818)
=0.62780372 / 0.63565131
=0.9877

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) / 3363.744
=-0.0639

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 -2.72 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.

Lamar Advertising Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0141.06941.06231.04310.95771.00891.0390.95831.01510.9778
GMI 1.00470.98331.04341.01830.98140.99520.98920.99361.00240.9967
AQI 0.96480.94650.99541.00141.03761.0111.00261.01541.00670.9991
SGI 1.09631.07990.99080.88121.03431.03521.04341.0561.03311.0515
DEPI 1.03331.06370.97750.89140.96970.99251.00060.94911.09731.2942
SGAI 1.06741.00580.96161.01061.03890.97561.01791.03431.00520.9956
LVGI 1.19391.311.02151.0010.98090.95870.99410.93681.0160.9877
TATA -0.0817-0.0793-0.0841-0.0904-0.0947-0.0908-0.0929-0.1-0.0509-0.0639
M-score -2.85-2.84-2.81-2.97-2.93-2.85-2.85-2.92-2.67-2.72
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