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Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-3.02 (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 -3.02 suggests that the company is not a manipulator.

LAYN' s 10-Year Beneish M-Score Range
Min: -3.93   Max: -1.44
Current: -3.02

-3.93
-1.44

During the past 13 years, the highest Beneish M-Score of Layne Christensen Co was -1.44. The lowest was -3.93. And the median was -2.83.


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 * 1.2576+0.528 * 1.1118+0.404 * 0.9235+0.892 * 0.9985+0.115 * 0.9569
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9131+4.679 * -0.1586-0.327 * 1.2213
=-3.02

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $110.8 Mil.
Revenue was 193.903 + 222.906 + 210.363 + 191.24 = $818.4 Mil.
Gross Profit was 24.635 + 37.447 + 31.365 + 29.089 = $122.5 Mil.
Total Current Assets was $284.5 Mil.
Total Assets was $545.5 Mil.
Property, Plant and Equipment(Net PPE) was $153.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $51.8 Mil.
Selling, General & Admin. Expense(SGA) was $126.1 Mil.
Total Current Liabilities was $179.7 Mil.
Long-Term Debt was $132.1 Mil.
Net Income was -22.891 + -4.504 + -55.028 + -27.727 = $-110.2 Mil.
Non Operating Income was -1.839 + -0.582 + 1.836 + 0.041 = $-0.5 Mil.
Cash Flow from Operations was -10.529 + 15.89 + -15.775 + -12.688 = $-23.1 Mil.
Accounts Receivable was $88.2 Mil.
Revenue was 169.934 + 201.978 + 221.254 + 226.446 = $819.6 Mil.
Gross Profit was 26.027 + 35.665 + 37.848 + 36.891 = $136.4 Mil.
Total Current Assets was $316.9 Mil.
Total Assets was $646.6 Mil.
Property, Plant and Equipment(Net PPE) was $191.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $61.1 Mil.
Selling, General & Admin. Expense(SGA) was $138.3 Mil.
Total Current Liabilities was $195.5 Mil.
Long-Term Debt was $107.1 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)
=(110.779 / 818.412) / (88.217 / 819.612)
=0.13535847 / 0.10763264
=1.2576

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)
=(37.447 / 819.612) / (24.635 / 818.412)
=0.16645803 / 0.1497241
=1.1118

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 - (284.528 + 153.184) / 545.513) / (1 - (316.857 + 191.393) / 646.618)
=0.19761399 / 0.21398724
=0.9235

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
=818.412 / 819.612
=0.9985

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))
=(61.091 / (61.091 + 191.393)) / (51.841 / (51.841 + 153.184))
=0.24195989 / 0.25285209
=0.9569

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)
=(126.08 / 818.412) / (138.278 / 819.612)
=0.15405444 / 0.16871154
=0.9131

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)
=((132.137 + 179.696) / 545.513) / ((107.118 + 195.527) / 646.618)
=0.57163257 / 0.46804296
=1.2213

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
=(-110.15 - -0.544 - -23.102) / 545.513
=-0.1586

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 -3.02 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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
DSRI 1.74510.80680.64751.23851.22751.02910.6460.93710.80981.2569
GMI 1.06150.99150.97241.0611.05721.05781.02781.19051.10451.1468
AQI 1.73830.81981.03481.07491.0321.13410.64671.19811.06070.9235
SGI 1.34811.5611.20131.1610.85951.15411.11290.96080.74670.9991
DEPI 1.23660.84630.8860.84990.88821.16370.91520.94080.81910.9569
SGAI 0.86210.93930.97310.9661.10930.94511.05921.01961.11370.911
LVGI 1.03381.05120.57210.90981.03041.03031.23581.14151.06741.2213
TATA -0.07-0.1013-0.0749-0.1106-0.1269-0.0641-0.1314-0.0881-0.2076-0.1606
M-score -1.44-2.73-2.84-2.55-2.99-2.51-3.54-2.86-3.83-3.01

Layne Christensen Co Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 1.02370.94180.57090.8770.84410.78880.94821.06821.04951.2576
GMI 1.10411.20051.17461.22261.26691.09751.06821.05391.0081.1118
AQI 0.67791.19811.14860.9490.93081.06070.85111.20041.12030.9235
SGI 1.01860.95590.91180.85340.78870.76660.76620.80820.90510.9985
DEPI 0.86950.94080.91610.98740.980.81910.95250.81740.81670.9569
SGAI 1.01971.02141.09151.10381.21791.11681.04380.96810.82760.9131
LVGI 1.27831.14151.13141.0871.12681.06741.18921.19471.19371.2213
TATA -0.1619-0.0876-0.134-0.1795-0.2077-0.185-0.1424-0.1591-0.1663-0.1586
M-score -3.38-2.85-3.50-3.51-3.75-3.74-3.50-3.30-3.30-3.02
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