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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.89 (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 -2.90 suggests that the company is not a manipulator.

LAMR' s 10-Year Beneish M-Score Range
Min: -3.4   Max: -1.38
Current: -2.89

-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 * 0.9745+0.528 * 0.9975+0.404 * 1.0077+0.892 * 1.0528+0.115 * 0.9636
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9755+4.679 * -0.0978-0.327 * 0.9486
=-2.90

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $162 Mil.
Revenue was 284.933 + 320.352 + 323.184 + 327.744 = $1,256 Mil.
Gross Profit was 173.425 + 210.39 + 213.544 + 217.021 = $814 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.
Net Income was -4.837 + 10.186 + 18.34 + 23.122 = $47 Mil.
Non Operating Income was -9.245 + -14.345 + 0 + 0 = $-24 Mil.
Cash Flow from Operations was 62.584 + 100.021 + 142.73 + 100.233 = $406 Mil.
Accounts Receivable was $158 Mil.
Revenue was 276.605 + 305.505 + 306.286 + 304.872 = $1,193 Mil.
Gross Profit was 170.086 + 199.306 + 202.441 + 199.801 = $772 Mil.
Total Current Assets was $336 Mil.
Total Assets was $3,511 Mil.
Property, Plant and Equipment(Net PPE) was $1,164 Mil.
Depreciation, Depletion and Amortization(DDA) was $298 Mil.
Selling, General & Admin. Expense(SGA) was $277 Mil.
Total Current Liabilities was $199 Mil.
Long-Term Debt was $2,122 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)
=(162.26 / 1256.213) / (158.168 / 1193.268)
=0.12916599 / 0.13255027
=0.9745

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)
=(210.39 / 1193.268) / (173.425 / 1256.213)
=0.64665607 / 0.64828178
=0.9975

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 - (343.117 + 1105.505) / 3426.578) / (1 - (335.703 + 1163.923) / 3510.658)
=0.57723945 / 0.5728362
=1.0077

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
=1256.213 / 1193.268
=1.0528

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))
=(297.611 / (297.611 + 1163.923)) / (296.204 / (296.204 + 1105.505))
=0.2036292 / 0.21131633
=0.9636

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)
=(284.011 / 1256.213) / (276.557 / 1193.268)
=0.22608507 / 0.23176436
=0.9755

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)
=((1945.985 + 202.614) / 3426.578) / ((2121.557 + 198.994) / 3510.658)
=0.62703928 / 0.66100173
=0.9486

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
=(46.811 - -23.59 - 405.568) / 3426.578
=-0.0978

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 -2.90 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 0.89061.1281.0141.06941.06231.04310.95771.00651.03880.9608
GMI 0.9721.00561.00470.98331.04341.01830.98140.99390.98910.9951
AQI 0.99360.99640.96480.94650.99541.00141.03761.0111.00261.0154
SGI 1.09061.15641.09631.07990.99080.88121.03431.03771.04361.0532
DEPI 0.94341.03171.03331.06370.97750.89140.96970.99251.00060.9491
SGAI 1.00680.97691.06741.00580.96161.01061.03890.97331.01761.037
LVGI 0.9730.94961.19391.311.02151.0010.98090.95870.99410.9368
TATA -0.0843-0.0809-0.0845-0.0793-0.0841-0.0904-0.0947-0.0903-0.0923-0.1
M-score -2.91-2.58-2.86-2.84-2.81-2.97-2.93-2.84-2.84-2.92

Lamar Advertising Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.96970.92380.98451.03881.04671.05881.02960.95930.97451.0025
GMI 0.9980.99420.99080.98910.98850.98830.99180.99420.99751.0038
AQI 1.00120.97961.00711.00260.99591.00430.96961.01541.00771.1794
SGI 1.03731.04111.03991.04361.04261.0521.05781.05491.05281.0352
DEPI 0.97520.96160.96011.00060.99741.00011.00140.94910.96360.9683
SGAI 0.96540.99171.00141.01761.05291.03891.04661.03530.97550.9747
LVGI 0.9760.98130.96530.99410.96930.96550.98260.93680.94860.9809
TATA -0.0878-0.0897-0.0909-0.0923-0.1017-0.0985-0.1018-0.0997-0.0978-0.0985
M-score -2.88-2.94-2.88-2.84-2.88-2.84-2.90-2.92-2.90-2.83
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