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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.50 (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 -2.50 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: -2.5

-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 * 0.99+0.528 * 0.9948+0.404 * 1.0101+0.892 * 1.0499+0.115 * 1.3305
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0265+4.679 * -0.0202-0.327 * 1.0006
=-2.50

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $188 Mil.
Revenue was 350.701 + 344.249 + 302.477 + 336.696 = $1,334 Mil.
Gross Profit was 229.025 + 228.298 + 189.245 + 221.6 = $868 Mil.
Total Current Assets was $321 Mil.
Total Assets was $3,416 Mil.
Property, Plant and Equipment(Net PPE) was $1,089 Mil.
Depreciation, Depletion and Amortization(DDA) was $200 Mil.
Selling, General & Admin. Expense(SGA) was $310 Mil.
Total Current Liabilities was $232 Mil.
Long-Term Debt was $1,949 Mil.
Net Income was 85.965 + 59.36 + 40.716 + 207.883 = $394 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 125.253 + 133.486 + 54.731 + 149.325 = $463 Mil.
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.



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)
=(187.7 / 1334.123) / (180.584 / 1270.716)
=0.14069168 / 0.14211201
=0.99

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)
=(228.298 / 1270.716) / (229.025 / 1334.123)
=0.64733662 / 0.6507406
=0.9948

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 - (320.843 + 1088.924) / 3416.4) / (1 - (314.876 + 1095.363) / 3369.76)
=0.58735306 / 0.58150165
=1.0101

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
=1334.123 / 1270.716
=1.0499

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))
=(284.337 / (284.337 + 1095.363)) / (199.581 / (199.581 + 1088.924))
=0.20608611 / 0.15489346
=1.3305

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)
=(310.3 / 1334.123) / (287.913 / 1270.716)
=0.23258725 / 0.22657541
=1.0265

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)
=((1949.055 + 232.243) / 3416.4) / ((1925.476 + 224.8) / 3369.76)
=0.63847852 / 0.63810954
=1.0006

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
=(393.924 - 0 - 462.795) / 3416.4
=-0.0202

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 -2.50 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.06161.0340.95830.97351.00150.97241.01510.99850.94760.99
GMI 0.98970.99410.99360.99691.00330.99991.00240.99460.98780.9948
AQI 1.00430.96961.01541.00771.0231.04331.00671.01391.01161.0101
SGI 1.04921.05341.0561.05381.03621.03491.03311.04021.0491.0499
DEPI 1.00011.00140.94910.96360.96830.99881.09731.17111.27881.3305
SGAI 1.04161.0511.03430.97450.97370.96361.00521.02061.03271.0265
LVGI 0.96550.98260.93680.94860.97380.98541.0161.01891.0051.0006
TATA -0.0991-0.1027-0.1-0.0982-0.0989-0.0899-0.0509-0.0372-0.0369-0.0202
M-score -2.84-2.90-2.92-2.90-2.89-2.87-2.67-2.61-2.63-2.50
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