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Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

LAYN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.93   Max: -1.44
Current: -2.99

-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 -2.82.


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 * 0.7732+0.528 * 1.0577+0.404 * 1.0183+0.892 * 1.0991+0.115 * 1.0041
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9958+4.679 * -0.0851-0.327 * 1.1003
=-2.99

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $93.4 Mil.
Revenue was 173.179 + 176.317 + 194.363 + 255.744 = $799.6 Mil.
Gross Profit was 30.238 + 25.068 + 33.687 + 29.165 = $118.2 Mil.
Total Current Assets was $306.4 Mil.
Total Assets was $518.5 Mil.
Property, Plant and Equipment(Net PPE) was $117.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $39.6 Mil.
Selling, General & Admin. Expense(SGA) was $121.3 Mil.
Total Current Liabilities was $163.3 Mil.
Long-Term Debt was $162.7 Mil.
Net Income was -3.442 + -18.154 + -6.559 + -22.891 = $-51.0 Mil.
Non Operating Income was 0.095 + -1.348 + 5.817 + 0.812 = $5.4 Mil.
Cash Flow from Operations was 1.345 + -16.367 + 13.237 + -10.529 = $-12.3 Mil.
Accounts Receivable was $110.0 Mil.
Revenue was 199.112 + 184.1 + 174.389 + 169.934 = $727.5 Mil.
Gross Profit was 36.144 + 28.882 + 22.658 + 26.027 = $113.7 Mil.
Total Current Assets was $321.3 Mil.
Total Assets was $591.9 Mil.
Property, Plant and Equipment(Net PPE) was $164.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.8 Mil.
Selling, General & Admin. Expense(SGA) was $110.9 Mil.
Total Current Liabilities was $206.9 Mil.
Long-Term Debt was $131.3 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)
=(93.435 / 799.603) / (109.956 / 727.535)
=0.11685174 / 0.151135
=0.7732

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)
=(25.068 / 727.535) / (30.238 / 799.603)
=0.15629626 / 0.14777083
=1.0577

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 - (306.406 + 117.153) / 518.508) / (1 - (321.341 + 164.115) / 591.89)
=0.18311964 / 0.17982057
=1.0183

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
=799.603 / 727.535
=1.0991

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))
=(55.766 / (55.766 + 164.115)) / (39.589 / (39.589 + 117.153))
=0.253619 / 0.25257429
=1.0041

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)
=(121.335 / 799.603) / (110.863 / 727.535)
=0.15174405 / 0.15238167
=0.9958

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)
=((162.712 + 163.308) / 518.508) / ((131.332 + 206.889) / 591.89)
=0.62876561 / 0.57142543
=1.1003

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
=(-51.046 - 5.376 - -12.314) / 518.508
=-0.0851

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 -2.99 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

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 0.8770.84410.78880.9691.13121.1461.26541.04180.77910.7732
GMI 1.22261.26691.09751.10021.07351.0061.15871.03751.03161.0577
AQI 0.9490.93081.06070.85111.20041.12030.92351.15611.17711.0183
SGI 0.85340.78870.76660.74970.76310.82880.99241.08571.13031.0991
DEPI 0.98740.980.81910.95250.81740.81670.95690.85360.92571.0041
SGAI 1.10381.21791.11681.04460.98070.85160.8980.87420.92860.9958
LVGI 1.0871.12681.06741.18921.19471.19371.22131.1441.11491.1003
TATA -0.1795-0.2077-0.185-0.1422-0.1566-0.1638-0.1608-0.1737-0.1149-0.0851
M-score -3.51-3.75-3.74-3.48-3.26-3.27-3.00-3.14-3.05-2.99
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