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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

LAMR' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.82
Current: -2.67

-3.33
-1.82

During the past 13 years, the highest Beneish M-Score of Lamar Advertising Co was -1.82. The lowest was -3.33. 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 * 1.0151+0.528 * 1.0024+0.404 * 1.0067+0.892 * 1.0331+0.115 * 1.0973
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0052+4.679 * -0.0509-0.327 * 1.016
=-2.67

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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.
Net Income was 207.883 + 35.05 + 15.422 + -4.837 = $254 Mil.
Non Operating Income was 0 + 0 + -20.847 + -9.245 = $-30 Mil.
Cash Flow from Operations was 149.325 + 129.772 + 110.848 + 62.584 = $453 Mil.
Accounts Receivable was $162 Mil.
Revenue was 320.352 + 321.141 + 327.744 + 276.605 = $1,246 Mil.
Gross Profit was 210.39 + 211.501 + 217.021 + 170.086 = $809 Mil.
Total Current Assets was $282 Mil.
Total Assets was $3,402 Mil.
Property, Plant and Equipment(Net PPE) was $1,122 Mil.
Depreciation, Depletion and Amortization(DDA) was $301 Mil.
Selling, General & Admin. Expense(SGA) was $289 Mil.
Total Current Liabilities was $245 Mil.
Long-Term Debt was $1,883 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)
=(169.61 / 1287.06) / (161.741 / 1245.842)
=0.13178096 / 0.12982465
=1.0151

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)
=(222.61 / 1245.842) / (221.6 / 1287.06)
=0.64935843 / 0.64782605
=1.0024

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 - (273.144 + 1083.64) / 3318.818) / (1 - (282.058 + 1121.929) / 3401.618)
=0.59118457 / 0.58725906
=1.0067

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
=1287.06 / 1245.842
=1.0331

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))
=(300.579 / (300.579 + 1121.929)) / (258.435 / (258.435 + 1083.64))
=0.21130215 / 0.19256375
=1.0973

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)
=(299.878 / 1287.06) / (288.786 / 1245.842)
=0.23299458 / 0.23179986
=1.0052

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)
=((1884.27 + 225.341) / 3318.818) / ((1882.867 + 245.353) / 3401.618)
=0.63565131 / 0.62564932
=1.016

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
=(253.518 - -30.092 - 452.529) / 3318.818
=-0.0509

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 -2.67 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.98451.04161.04951.06161.0340.95830.97351.00150.97241.0151
GMI 0.99080.99050.98990.98970.99410.99360.99691.00330.99991.0024
AQI 1.00711.00260.99591.00430.96961.01541.00771.0231.04331.0067
SGI 1.03991.04081.03981.04921.05341.0561.05381.03621.03491.0331
DEPI 0.96011.00060.99741.00011.00140.94910.96360.96830.99881.0973
SGAI 1.00141.02041.05571.04161.0511.03430.97450.97370.96361.0052
LVGI 0.96530.99410.96930.96550.98260.93680.94860.97380.98541.016
TATA -0.0909-0.0929-0.1022-0.0991-0.1027-0.1-0.0982-0.0989-0.0899-0.0509
M-score -2.88-2.85-2.88-2.84-2.90-2.92-2.90-2.89-2.87-2.67
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