Switch to:
Layne Christensen Company (NAS:LAYN)
Beneish M-Score
-4.20 (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 Company has a M-score of -4.20 suggests that the company is not a manipulator.

LAYN' s 10-Year Beneish M-Score Range
Min: -4.2   Max: -1.58
Current: -4.2

-4.2
-1.58

During the past 13 years, the highest Beneish M-Score of Layne Christensen Company was -1.58. The lowest was -4.20. And the median was -2.77.


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 Company 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 * 0.5138+0.528 * 1.2175+0.404 * 0.9308+0.892 * 0.8172+0.115 * 0.98
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.225+4.679 * -0.239-0.327 * 1.1268
=-4.20

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

This Year (Oct13) TTM:Last Year (Oct12) TTM:
Accounts Receivable was $125 Mil.
Revenue was 216.462 + 232.015 + 226.446 + 234.606 = $910 Mil.
Gross Profit was 39.554 + 39.891 + 36.891 + 32.481 = $149 Mil.
Total Current Assets was $336 Mil.
Total Assets was $685 Mil.
Property, Plant and Equipment(Net PPE) was $239 Mil.
Depreciation, Depletion and Amortization(DDA) was $62 Mil.
Selling, General & Admin. Expense(SGA) was $164 Mil.
Total Current Liabilities was $225 Mil.
Long-Term Debt was $103 Mil.
Net Income was -15.772 + -74.82 + -23.779 + -24.852 = $-139 Mil.
Non Operating Income was -2.18 + -1.232 + 2.386 + 3.08 = $2 Mil.
Cash Flow from Operations was 1.843 + -15.793 + 10.8 + 25.543 = $22 Mil.
Accounts Receivable was $298 Mil.
Revenue was 281.281 + 287.972 + 271.765 + 271.924 = $1,113 Mil.
Gross Profit was 56.923 + 57.901 + 52.88 + 54.002 = $222 Mil.
Total Current Assets was $429 Mil.
Total Assets was $839 Mil.
Property, Plant and Equipment(Net PPE) was $265 Mil.
Depreciation, Depletion and Amortization(DDA) was $68 Mil.
Selling, General & Admin. Expense(SGA) was $164 Mil.
Total Current Liabilities was $238 Mil.
Long-Term Debt was $118 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)
=(125.269 / 909.529) / (298.351 / 1112.942)
=0.13772953 / 0.26807417
=0.5138

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)
=(39.891 / 1112.942) / (39.554 / 909.529)
=0.19920715 / 0.16361985
=1.2175

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 - (336.318 + 238.682) / 684.94) / (1 - (428.902 + 265.298) / 838.862)
=0.16051041 / 0.1724503
=0.9308

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
=909.529 / 1112.942
=0.8172

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))
=(67.564 / (67.564 + 265.298)) / (62.352 / (62.352 + 238.682))
=0.20297901 / 0.20712611
=0.98

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)
=(163.697 / 909.529) / (163.51 / 1112.942)
=0.17997997 / 0.14691691
=1.225

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)
=((102.743 + 225.147) / 684.94) / ((118.34 + 238.031) / 838.862)
=0.47871346 / 0.42482673
=1.1268

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
=(-139.223 - 2.054 - 22.393) / 684.94
=-0.239

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 Company has a M-score of -4.20 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 Company Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13
DSRI 1.35660.83251.31770.80140.96350.8611.20620.7666
GMI 1.05881.02381.06150.99150.97241.0611.05721.3431
AQI 0.82020.96051.73830.81981.03481.07491.0320.9068
SGI 1.06471.26251.34811.5611.20131.1610.85951.067
DEPI 1.29241.11441.23660.84630.8860.84990.88820.8899
SGAI 0.9660.88460.86210.93930.97310.9661.10931.1424
LVGI 1.09051.01941.03381.05120.57210.90981.03041.4975
TATA -0.0072-0.0451-0.07-0.1013-0.0735-0.1106-0.1269-0.0984
M-score -2.16-2.59-1.83-2.74-2.55-2.90-3.01-3.15

Layne Christensen Company Quarterly Data

Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13
DSRI 0.6110.60740.63491.75811.70891.7540.95540.57810.530.5138
GMI 1.08741.05371.01931.08711.08621.10411.17841.15091.19291.2175
AQI 1.01280.99520.64670.66480.6350.67791.19811.14860.9490.9308
SGI 1.15451.11371.11851.08321.04561.01860.96170.91760.86880.8172
DEPI 1.08110.99030.91520.91480.86470.86950.94080.91610.98740.98
SGAI 1.00251.02511.05721.03961.0591.01971.03071.10081.10881.225
LVGI 1.04961.01191.23581.20271.31091.27831.14151.13141.0871.1268
TATA -0.0303-0.0257-0.1315-0.1377-0.1867-0.1619-0.098-0.1436-0.2103-0.239
M-score -2.80-2.84-3.55-2.52-2.89-2.71-2.90-3.54-3.98-4.20
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide