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Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-3.05 (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.

Layne Christensen Co has a M-score of -3.05 suggests that the company is not a manipulator.

LAYN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.9   Max: -1.44
Current: -3.05

-3.9
-1.44

During the past 13 years, the highest Beneish M-Score of Layne Christensen Co was -1.44. The lowest was -3.90. 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 Layne Christensen 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 * 0.9512+0.528 * 0.9215+0.404 * 0.8086+0.892 * 0.9549+0.115 * 1.1508
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9736+4.679 * -0.0738-0.327 * 1.1297
=-3.05

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $91.8 Mil.
Revenue was 159.243 + 173.179 + 176.317 + 194.363 = $703.1 Mil.
Gross Profit was 26.586 + 30.238 + 25.068 + 33.687 = $115.6 Mil.
Total Current Assets was $286.3 Mil.
Total Assets was $488.7 Mil.
Property, Plant and Equipment(Net PPE) was $113.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.9 Mil.
Selling, General & Admin. Expense(SGA) was $109.8 Mil.
Total Current Liabilities was $155.0 Mil.
Long-Term Debt was $159.0 Mil.
Net Income was -16.623 + -3.442 + -18.154 + -6.559 = $-44.8 Mil.
Non Operating Income was -12.951 + 0.095 + -1.348 + 5.817 = $-8.4 Mil.
Cash Flow from Operations was 1.478 + 1.345 + -16.367 + 13.237 = $-0.3 Mil.
Accounts Receivable was $101.1 Mil.
Revenue was 178.711 + 199.112 + 184.1 + 174.389 = $736.3 Mil.
Gross Profit was 23.847 + 36.144 + 28.882 + 22.658 = $111.5 Mil.
Total Current Assets was $284.5 Mil.
Total Assets was $541.9 Mil.
Property, Plant and Equipment(Net PPE) was $135.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $51.8 Mil.
Selling, General & Admin. Expense(SGA) was $118.1 Mil.
Total Current Liabilities was $179.7 Mil.
Long-Term Debt was $128.6 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)
=(91.81 / 703.102) / (101.08 / 736.312)
=0.13057849 / 0.13727876
=0.9512

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)
=(30.238 / 736.312) / (26.586 / 703.102)
=0.15147247 / 0.1643844
=0.9215

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 - (286.294 + 113.497) / 488.657) / (1 - (284.528 + 135.529) / 541.942)
=0.18185762 / 0.22490414
=0.8086

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
=703.102 / 736.312
=0.9549

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))
=(51.841 / (51.841 + 135.529)) / (35.925 / (35.925 + 113.497))
=0.27667716 / 0.24042644
=1.1508

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)
=(109.765 / 703.102) / (118.065 / 736.312)
=0.15611533 / 0.16034643
=0.9736

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)
=((158.986 + 155.014) / 488.657) / ((128.566 + 179.696) / 541.942)
=0.64257751 / 0.56880995
=1.1297

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
=(-44.778 - -8.387 - -0.307) / 488.657
=-0.0738

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.

Layne Christensen Co has a M-score of -3.05 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.

Layne Christensen Co Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
DSRI 0.80680.64751.23851.22751.00330.65080.94850.75691.23441.0607
GMI 0.99150.97241.0611.05721.01741.04531.19461.08431.190.8723
AQI 0.81981.03481.07491.0321.13410.64671.19811.06071.0510.8086
SGI 1.5611.20131.1610.85951.18381.10480.94920.79890.92820.8563
DEPI 0.84630.8860.84990.88821.16370.91520.94080.81910.87451.1508
SGAI 0.93930.97310.98161.06190.9671.05951.03331.11810.89921.0333
LVGI 1.05120.57210.90981.03041.03031.23581.14151.06741.21531.1297
TATA -0.1013-0.0735-0.1151-0.1382-0.0483-0.1314-0.0984-0.1784-0.1593-0.072
M-score -2.73-2.84-2.58-3.03-2.46-3.54-2.91-3.71-3.02-3.06

Layne Christensen Co Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 0.89530.77280.94921.10571.11421.23461.10860.82840.82470.9512
GMI 1.33991.05711.05511.02090.94311.09350.97530.96860.99240.9215
AQI 0.93081.06070.85111.20041.12031.0511.15611.17711.01830.8086
SGI 0.74360.78250.76530.78080.85250.92811.02021.0631.03030.9549
DEPI 0.980.81910.95250.81740.81670.87450.85360.92571.00411.1508
SGAI 1.23061.09461.01790.95030.81710.97650.95021.01491.09620.9736
LVGI 1.12681.06741.18921.19471.19371.21531.1441.11491.10031.1297
TATA -0.208-0.1803-0.1377-0.1515-0.1587-0.1545-0.1666-0.1071-0.0773-0.0738
M-score -3.71-3.73-3.48-3.27-3.28-3.06-3.15-3.08-3.02-3.05
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