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Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-3.13 (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 -3.13 suggests that the company is not a manipulator.

LAYN' s 10-Year Beneish M-Score Range
Min: -3.93   Max: -1.44
Current: -3.13

-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 -2.80.


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 * 1.0567+0.528 * 1.0288+0.404 * 1.1561+0.892 * 1.0703+0.115 * 0.8536
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8878+4.679 * -0.1713-0.327 * 1.144
=-3.13

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $118.4 Mil.
Revenue was 194.363 + 193.903 + 222.906 + 210.363 = $821.5 Mil.
Gross Profit was 33.687 + 24.635 + 37.447 + 31.365 = $127.1 Mil.
Total Current Assets was $312.5 Mil.
Total Assets was $566.5 Mil.
Property, Plant and Equipment(Net PPE) was $146.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.3 Mil.
Selling, General & Admin. Expense(SGA) was $122.1 Mil.
Total Current Liabilities was $185.7 Mil.
Long-Term Debt was $161.8 Mil.
Net Income was -6.559 + -22.891 + -4.504 + -55.028 = $-89.0 Mil.
Non Operating Income was 5.817 + -1.839 + -0.582 + 1.836 = $5.2 Mil.
Cash Flow from Operations was 13.237 + -10.529 + 15.89 + -15.775 = $2.8 Mil.
Accounts Receivable was $104.7 Mil.
Revenue was 174.389 + 169.934 + 201.978 + 221.254 = $767.6 Mil.
Gross Profit was 22.658 + 26.027 + 35.665 + 37.848 = $122.2 Mil.
Total Current Assets was $346.2 Mil.
Total Assets was $680.2 Mil.
Property, Plant and Equipment(Net PPE) was $221.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $59.7 Mil.
Selling, General & Admin. Expense(SGA) was $128.5 Mil.
Total Current Liabilities was $216.7 Mil.
Long-Term Debt was $147.9 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)
=(118.422 / 821.535) / (104.702 / 767.555)
=0.14414724 / 0.13640977
=1.0567

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)
=(24.635 / 767.555) / (33.687 / 821.535)
=0.15920423 / 0.15475178
=1.0288

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 - (312.544 + 146.074) / 566.548) / (1 - (346.172 + 221.91) / 680.164)
=0.1905046 / 0.16478673
=1.1561

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
=821.535 / 767.555
=1.0703

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))
=(59.696 / (59.696 + 221.91)) / (48.258 / (48.258 + 146.074))
=0.21198412 / 0.2483276
=0.8536

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)
=(122.076 / 821.535) / (128.47 / 767.555)
=0.14859501 / 0.16737563
=0.8878

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)
=((161.775 + 185.659) / 566.548) / ((147.919 + 216.673) / 680.164)
=0.61324724 / 0.53603543
=1.144

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
=(-88.982 - 5.232 - 2.823) / 566.548
=-0.1713

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 -3.13 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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 0.94180.57090.8770.84410.78880.9691.0921.07231.2841.0567
GMI 1.20051.17461.22261.26691.09751.10021.08821.04061.14921.0288
AQI 1.19811.14860.9490.93081.06070.85111.20041.12030.92351.1561
SGI 0.95590.91180.85340.78870.76660.74970.79060.88590.9781.0703
DEPI 0.94080.91610.98740.980.81910.95250.81740.81670.95690.8536
SGAI 1.02141.09151.10381.21791.11681.04460.9680.8260.91220.8878
LVGI 1.14151.13141.0871.12681.06741.18921.19471.19371.22131.144
TATA -0.0876-0.134-0.1795-0.2077-0.185-0.1422-0.1588-0.166-0.1583-0.1713
M-score -2.85-3.50-3.51-3.75-3.74-3.48-3.28-3.28-2.99-3.13
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