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Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-3.46 (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 -3.46 suggests that the company is not a manipulator.

LAYN' s 10-Year Beneish M-Score Range
Min: -4.18   Max: -1.58
Current: -3.46

-4.18
-1.58

During the past 13 years, the highest Beneish M-Score of Layne Christensen Co was -1.58. The lowest was -4.18. And the median was -2.75.


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 * 0.9409+0.528 * 1.0492+0.404 * 0.8511+0.892 * 0.8011+0.115 * 0.9525
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0496+4.679 * -0.1361-0.327 * 1.1892
=-3.46

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

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Accounts Receivable was $113.8 Mil.
Revenue was 191.24 + 184.36 + 216.462 + 232.015 = $824.1 Mil.
Gross Profit was 29.089 + 31.156 + 39.554 + 39.891 = $139.7 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 $139.4 Mil.
Total Current Liabilities was $216.7 Mil.
Long-Term Debt was $147.9 Mil.
Net Income was -27.727 + -14.268 + -15.772 + -74.82 = $-132.6 Mil.
Non Operating Income was 0.041 + -12.009 + -2.18 + -1.232 = $-15.4 Mil.
Cash Flow from Operations was -12.688 + 2.019 + 1.843 + -15.793 = $-24.6 Mil.
Accounts Receivable was $150.9 Mil.
Revenue was 226.446 + 229.742 + 282.879 + 289.56 = $1,028.6 Mil.
Gross Profit was 36.891 + 28.819 + 58.137 + 59.102 = $182.9 Mil.
Total Current Assets was $379.5 Mil.
Total Assets was $791.7 Mil.
Property, Plant and Equipment(Net PPE) was $259.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $65.5 Mil.
Selling, General & Admin. Expense(SGA) was $165.7 Mil.
Total Current Liabilities was $271.1 Mil.
Long-Term Debt was $85.8 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)
=(113.769 / 824.077) / (150.936 / 1028.627)
=0.13805627 / 0.14673541
=0.9409

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)
=(31.156 / 1028.627) / (29.089 / 824.077)
=0.17785747 / 0.16951086
=1.0492

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 - (346.172 + 221.91) / 680.164) / (1 - (379.457 + 258.968) / 791.708)
=0.16478673 / 0.19361052
=0.8511

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
=824.077 / 1028.627
=0.8011

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))
=(65.518 / (65.518 + 258.968)) / (59.696 / (59.696 + 221.91))
=0.20191318 / 0.21198412
=0.9525

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)
=(139.369 / 824.077) / (165.741 / 1028.627)
=0.16912133 / 0.16112838
=1.0496

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)
=((147.919 + 216.673) / 680.164) / ((85.785 + 271.066) / 791.708)
=0.53603543 / 0.45073562
=1.1892

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
=(-132.587 - -15.38 - -24.619) / 680.164
=-0.1361

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 -3.46 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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
DSRI 0.83251.31770.80140.96350.56751.831.02150.64280.9680.8672
GMI 1.02381.06150.99150.97241.0611.05721.01741.04531.19461.0843
AQI 0.96051.73830.81981.03481.07491.0321.13410.64671.19810.7757
SGI 1.26251.34811.5611.20131.1610.85951.18381.10480.94920.7989
DEPI 1.11441.23660.84630.8860.84990.88821.16370.91520.94080.9397
SGAI 0.88460.86210.93930.97310.98161.06190.9671.05951.03331.1181
LVGI 1.01941.03381.05120.57210.90981.01561.04521.23411.14311.0716
TATA -0.0451-0.07-0.1013-0.0735-0.1151-0.1379-0.0483-0.1314-0.0984-0.1784
M-score -2.59-1.83-2.74-2.55-3.19-2.47-2.45-3.55-2.89-3.71

Layne Christensen Co Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
DSRI 0.64281.77111.73541.79370.96530.58910.5390.5220.86960.9409
GMI 1.04531.10691.11581.13961.19361.17961.22671.2611.08521.0492
AQI 0.64670.66480.6350.67791.19811.14860.9490.93080.77570.8511
SGI 1.10481.07521.02960.99610.95190.90050.85430.80430.79660.8011
DEPI 0.91520.91480.86470.86950.94080.91610.98740.980.93970.9525
SGAI 1.05951.04521.07111.03731.03341.09691.09611.20441.11811.0496
LVGI 1.23411.20271.31091.27831.14311.13141.0871.12681.07161.1892
TATA -0.1314-0.138-0.187-0.1621-0.0985-0.1437-0.2104-0.2392-0.177-0.1361
M-score -3.55-2.51-2.87-2.68-2.89-3.53-3.97-4.18-3.71-3.46
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