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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 -2.62 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 * 1.0089+0.528 * 1.0052+0.404 * 1.053+0.892 * 1.065+0.115 * 1.2676
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0032+4.679 * -0.0509-0.327 * 1.0599
=-2.62

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $181 Mil.
Revenue was 338.533 + 355.969 + 350.701 + 344.249 = $1,389 Mil.
Gross Profit was 209.808 + 233.068 + 229.025 + 228.298 = $900 Mil.
Total Current Assets was $327 Mil.
Total Assets was $3,895 Mil.
Property, Plant and Equipment(Net PPE) was $1,167 Mil.
Depreciation, Depletion and Amortization(DDA) was $194 Mil.
Selling, General & Admin. Expense(SGA) was $322 Mil.
Total Current Liabilities was $217 Mil.
Long-Term Debt was $2,420 Mil.
Net Income was 51.314 + 76.529 + 85.965 + 59.36 = $273 Mil.
Non Operating Income was -3.142 + 0 + 0 + 0 = $-3 Mil.
Cash Flow from Operations was 51.537 + 164.18 + 125.253 + 133.486 = $474 Mil.
Accounts Receivable was $169 Mil.
Revenue was 302.477 + 336.696 + 334.998 + 330.433 = $1,305 Mil.
Gross Profit was 189.245 + 221.6 + 222.61 + 216.156 = $850 Mil.
Total Current Assets was $310 Mil.
Total Assets was $3,355 Mil.
Property, Plant and Equipment(Net PPE) was $1,082 Mil.
Depreciation, Depletion and Amortization(DDA) was $238 Mil.
Selling, General & Admin. Expense(SGA) was $302 Mil.
Total Current Liabilities was $206 Mil.
Long-Term Debt was $1,938 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)
=(181.08 / 1389.452) / (168.527 / 1304.604)
=0.13032476 / 0.12917866
=1.0089

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)
=(233.068 / 1304.604) / (209.808 / 1389.452)
=0.65124053 / 0.6478806
=1.0052

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 - (327.257 + 1167.048) / 3894.512) / (1 - (309.852 + 1081.666) / 3355.224)
=0.61630494 / 0.58526823
=1.053

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
=1389.452 / 1304.604
=1.065

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))
=(238.139 / (238.139 + 1081.666)) / (193.692 / (193.692 + 1167.048))
=0.18043499 / 0.14234314
=1.2676

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)
=(322.16 / 1389.452) / (301.514 / 1304.604)
=0.23186119 / 0.23111534
=1.0032

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)
=((2420.294 + 217.009) / 3894.512) / ((1937.515 + 206.144) / 3355.224)
=0.67718446 / 0.6389019
=1.0599

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
=(273.168 - -3.142 - 474.456) / 3894.512
=-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 -2.62 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

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.95830.97351.00150.97241.01510.99850.94760.990.97781.0089
GMI 0.99360.99691.00330.99991.00240.99460.98780.99480.99671.0052
AQI 1.01541.00771.0231.04331.00671.01391.01161.01011.00491.053
SGI 1.0561.05381.03621.03491.03311.04021.0491.04991.05151.065
DEPI 0.94910.96360.96830.99881.09731.17111.27881.33051.29421.2676
SGAI 1.03430.97450.97370.96361.00521.02061.03271.02650.99561.0032
LVGI 0.93680.94860.97380.98541.0161.01891.0051.00060.99251.0599
TATA -0.1-0.0982-0.0989-0.0899-0.0509-0.0372-0.0369-0.0202-0.0634-0.0509
M-score -2.92-2.90-2.89-2.87-2.67-2.61-2.63-2.50-2.71-2.62
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