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Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-3.18 (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 -3.18 suggests that the company is not a manipulator.

LAYN' s 10-Year Beneish M-Score Range
Min: -3.93   Max: -1.44
Current: -3.18

-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 -2.78.


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 * 0.9748+0.528 * 0.965+0.404 * 1.1203+0.892 * 0.9745+0.115 * 0.8167
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.848+4.679 * -0.1344-0.327 * 1.1937
=-3.18

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $110.0 Mil.
Revenue was 222.906 + 210.363 + 191.24 + 230.872 = $855.4 Mil.
Gross Profit was 37.447 + 31.365 + 29.089 + 41.469 = $139.4 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 $129.8 Mil.
Total Current Liabilities was $206.9 Mil.
Long-Term Debt was $131.3 Mil.
Net Income was -4.504 + -55.028 + -27.727 + -14.268 = $-101.5 Mil.
Non Operating Income was -0.582 + 1.836 + 0.041 + -12.734 = $-11.4 Mil.
Cash Flow from Operations was 15.89 + -15.775 + -12.688 + 2.019 = $-10.6 Mil.
Accounts Receivable was $115.8 Mil.
Revenue was 201.978 + 221.254 + 226.446 + 228.108 = $877.8 Mil.
Gross Profit was 35.665 + 37.848 + 36.891 + 27.615 = $138.0 Mil.
Total Current Assets was $336.3 Mil.
Total Assets was $684.9 Mil.
Property, Plant and Equipment(Net PPE) was $238.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $62.4 Mil.
Selling, General & Admin. Expense(SGA) was $157.1 Mil.
Total Current Liabilities was $225.1 Mil.
Long-Term Debt was $102.7 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)
=(109.956 / 855.381) / (115.758 / 877.786)
=0.12854623 / 0.13187497
=0.9748

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)
=(31.365 / 877.786) / (37.447 / 855.381)
=0.15723536 / 0.16293324
=0.965

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 - (321.341 + 164.115) / 591.89) / (1 - (336.318 + 238.682) / 684.94)
=0.17982057 / 0.16051041
=1.1203

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
=855.381 / 877.786
=0.9745

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))
=(62.352 / (62.352 + 238.682)) / (55.766 / (55.766 + 164.115))
=0.20712611 / 0.253619
=0.8167

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)
=(129.795 / 855.381) / (157.068 / 877.786)
=0.1517394 / 0.17893655
=0.848

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)
=((131.332 + 206.889) / 591.89) / ((102.743 + 225.147) / 684.94)
=0.57142543 / 0.47871346
=1.1937

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
=(-101.527 - -11.439 - -10.554) / 591.89
=-0.1344

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 -3.18 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 0.7771.74510.80680.64751.23851.22751.02910.6460.93710.8248
GMI 1.02381.06150.99150.97241.0611.05721.05781.02781.19051.0643
AQI 0.96051.73830.81981.03481.07491.0321.13410.64671.19810.7757
SGI 1.26251.34811.5611.20131.1610.85951.15411.11290.96080.8037
DEPI 1.11441.23660.84630.8860.84990.88821.16370.91520.94080.9397
SGAI 0.88460.86210.93930.97310.9661.10930.94511.05921.01961.1283
LVGI 1.01941.03381.05120.57210.90981.03041.03031.23581.14151.0716
TATA -0.0451-0.07-0.1013-0.0749-0.1106-0.1269-0.0641-0.1314-0.0881-0.1784
M-score -2.64-1.44-2.73-2.84-2.55-2.99-2.51-3.54-2.86-3.76

Layne Christensen Co Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 1.05921.02370.94180.57090.8770.84410.80490.87980.99020.9748
GMI 1.08621.10411.20051.17461.22261.26691.05921.02781.00930.965
AQI 0.6350.67791.19811.14860.9490.93080.77570.85111.20041.1203
SGI 1.04561.01860.95590.91180.85340.78870.82360.82570.87190.9745
DEPI 0.86470.86950.94080.91610.98740.980.93970.95250.81740.8167
SGAI 1.0591.01971.02141.09151.10381.21791.13081.05830.98520.848
LVGI 1.31091.27831.14151.13141.0871.12681.07161.18921.19471.1937
TATA -0.1867-0.1619-0.0876-0.134-0.1795-0.2077-0.1558-0.1147-0.1272-0.1344
M-score -3.49-3.38-2.85-3.50-3.51-3.75-3.66-3.41-3.19-3.18
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