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Lamar Advertising Co (NAS:LAMR)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

LAMR' s 10-Year Beneish M-Score Range
Min: -3.33   Max: -1.82
Current: -2.92

-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 * 0.9583+0.528 * 0.9936+0.404 * 1.0154+0.892 * 1.056+0.115 * 0.9491
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0343+4.679 * -0.1-0.327 * 0.9368
=-2.92

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $162 Mil.
Revenue was 314.495 + 323.184 + 324.684 + 283.479 = $1,246 Mil.
Gross Profit was 204.533 + 213.544 + 213.961 + 176.96 = $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.
Net Income was 6.614 + 18.34 + 21.255 + -6.07 = $40 Mil.
Non Operating Income was -14.345 + 0 + 0 + 0 = $-14 Mil.
Cash Flow from Operations was 100.021 + 142.73 + 100.233 + 51.721 = $395 Mil.
Accounts Receivable was $160 Mil.
Revenue was 302.34 + 306.286 + 304.872 + 266.238 = $1,180 Mil.
Gross Profit was 196.141 + 202.441 + 199.801 + 162.815 = $761 Mil.
Total Current Assets was $301 Mil.
Total Assets was $3,514 Mil.
Property, Plant and Equipment(Net PPE) was $1,180 Mil.
Depreciation, Depletion and Amortization(DDA) was $296 Mil.
Selling, General & Admin. Expense(SGA) was $264 Mil.
Total Current Liabilities was $219 Mil.
Long-Term Debt was $2,128 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)
=(161.741 / 1245.842) / (159.829 / 1179.736)
=0.12982465 / 0.13547862
=0.9583

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)
=(213.544 / 1179.736) / (204.533 / 1245.842)
=0.64522741 / 0.64935843
=0.9936

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 - (282.058 + 1121.929) / 3401.618) / (1 - (301.235 + 1180.359) / 3514.03)
=0.58725906 / 0.57837753
=1.0154

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
=1245.842 / 1179.736
=1.056

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))
=(296.083 / (296.083 + 1180.359)) / (300.579 / (300.579 + 1121.929))
=0.20053819 / 0.21130215
=0.9491

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)
=(288.786 / 1245.842) / (264.406 / 1179.736)
=0.23179986 / 0.22412302
=1.0343

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)
=((1882.867 + 245.353) / 3401.618) / ((2127.72 + 219.108) / 3514.03)
=0.62564932 / 0.66784518
=0.9368

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
=(40.139 - -14.345 - 394.705) / 3401.618
=-0.1

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 -2.92 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 0.89061.1281.0141.06941.06231.04310.95771.00651.04160.9583
GMI 0.9721.00561.00470.98331.04341.01830.98140.99390.99050.9936
AQI 0.99360.99640.96480.94650.99541.00141.03761.0111.00261.0154
SGI 1.09061.15641.09631.07990.99080.88121.03431.03771.04081.056
DEPI 0.94341.03171.03331.06370.97750.89140.96970.99251.00060.9491
SGAI 1.00680.97691.06741.00580.96161.01061.03890.97331.02041.0343
LVGI 0.9730.94961.19391.311.02151.0010.98090.95870.99410.9368
TATA -0.0843-0.0809-0.0845-0.0793-0.0841-0.0904-0.0947-0.0903-0.0929-0.1
M-score -2.91-2.58-2.86-2.84-2.81-2.97-2.93-2.84-2.85-2.92

Lamar Advertising Co Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.97951.00650.96970.92380.98451.04161.04341.05821.02910.9583
GMI 0.99050.99390.9980.99420.99080.99050.98680.9880.99160.9936
AQI 1.00921.0111.00120.97961.00711.00260.99591.00430.96961.0154
SGI 1.03891.03771.03731.04111.03991.04081.04581.05251.05841.056
DEPI 0.99680.99250.97520.96160.96011.00060.99741.00011.00140.9491
SGAI 1.00360.97330.96540.99171.00141.02041.04961.03831.0461.0343
LVGI 0.96740.95870.9760.98130.96530.99410.96930.96550.98260.9368
TATA -0.1028-0.0903-0.0878-0.0897-0.0909-0.0929-0.101-0.0984-0.1017-0.1
M-score -2.94-2.84-2.88-2.94-2.88-2.85-2.88-2.84-2.90-2.92
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