Switch to:
GuruFocus has detected 3 Warning Signs with Layne Christensen Co $LAYN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Layne Christensen Co (NAS:LAYN)
Beneish M-Score
-3.29 (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 -3.29 suggests that the company is not a manipulator.

LAYN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.15   Max: 0.03
Current: -3.29

-4.15
0.03

During the past 13 years, the highest Beneish M-Score of Layne Christensen Co was 0.03. The lowest was -4.15. And the median was -2.84.


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 * 0.8772+0.528 * 0.9961+0.404 * 1.0521+0.892 * 0.8814+0.115 * 1.1537
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0197+4.679 * -0.127-0.327 * 1.0964
=-3.29

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $71.0 Mil.
Revenue was 129.617 + 153.567 + 159.049 + 159.739 = $602.0 Mil.
Gross Profit was 14.235 + 27.622 + 28.695 + 29.37 = $99.9 Mil.
Total Current Assets was $250.5 Mil.
Total Assets was $436.2 Mil.
Property, Plant and Equipment(Net PPE) was $102.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.9 Mil.
Selling, General & Admin. Expense(SGA) was $97.2 Mil.
Total Current Liabilities was $144.9 Mil.
Long-Term Debt was $162.3 Mil.
Net Income was -33.08 + -5.043 + -5.31 + -8.803 = $-52.2 Mil.
Non Operating Income was -12.166 + 1.795 + -0.374 + 0.916 = $-9.8 Mil.
Cash Flow from Operations was 1.203 + 14.081 + 3.265 + -5.577 = $13.0 Mil.
Accounts Receivable was $91.8 Mil.
Revenue was 159.243 + 173.179 + 176.317 + 174.271 = $683.0 Mil.
Gross Profit was 26.586 + 30.238 + 25.068 + 31.04 = $112.9 Mil.
Total Current Assets was $286.3 Mil.
Total Assets was $488.7 Mil.
Property, Plant and Equipment(Net PPE) was $113.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $35.9 Mil.
Selling, General & Admin. Expense(SGA) was $108.2 Mil.
Total Current Liabilities was $155.0 Mil.
Long-Term Debt was $159.0 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)
=(70.983 / 601.972) / (91.81 / 683.01)
=0.11791744 / 0.1344197
=0.8772

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)
=(112.932 / 683.01) / (99.922 / 601.972)
=0.16534458 / 0.16599111
=0.9961

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 - (250.483 + 102.22) / 436.151) / (1 - (286.294 + 113.497) / 488.657)
=0.19132823 / 0.18185762
=1.0521

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
=601.972 / 683.01
=0.8814

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))
=(35.925 / (35.925 + 113.497)) / (26.911 / (26.911 + 102.22))
=0.24042644 / 0.20840077
=1.1537

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)
=(97.202 / 601.972) / (108.158 / 683.01)
=0.16147263 / 0.15835493
=1.0197

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)
=((162.346 + 144.938) / 436.151) / ((158.986 + 155.014) / 488.657)
=0.70453581 / 0.64257751
=1.0964

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
=(-52.236 - -9.829 - 12.972) / 436.151
=-0.127

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 -3.29 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 local exchange's currency.

Layne Christensen Co Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
DSRI 0.64751.23851.22751.02910.650.98210.79411.22780.95820.8772
GMI 0.97241.0611.05721.05781.04341.22351.06431.08040.9210.9961
AQI 1.03481.07491.0321.13410.64671.19811.06071.0510.80861.0521
SGI 1.20131.1610.85951.15411.10610.91670.76150.93330.94790.8814
DEPI 0.8860.84990.88821.16370.91520.94080.81910.87451.15081.1537
SGAI 0.97310.9661.10930.94511.05181.01961.09050.99320.97461.0197
LVGI 0.57210.90981.03041.03031.23581.14151.06741.21531.12971.0964
TATA -0.0749-0.1121-0.1269-0.0641-0.0116-0.0884-0.2029-0.1543-0.072-0.127
M-score -2.84-2.56-2.99-2.51-2.98-2.84-3.83-3.07-3.04-3.29

Layne Christensen Co Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.11421.23461.13890.85120.84830.97920.84411.05391.02520.8772
GMI 0.94311.09350.97040.96410.9880.91610.97860.90340.88240.9961
AQI 1.12031.0511.15611.17711.01830.80860.96270.83510.97471.0521
SGI 0.85250.92810.99311.03441.00170.92760.9080.8940.89910.8814
DEPI 0.81670.87450.85360.92571.00411.15081.10771.29361.21031.1537
SGAI 0.81710.97650.96271.02891.11190.98761.01510.9540.94391.0197
LVGI 1.19371.21531.1441.11491.10031.12971.06471.04671.04691.0964
TATA -0.1587-0.1545-0.1647-0.0875-0.0537-0.072-0.0306-0.0665-0.105-0.127
M-score -3.28-3.06-3.14-2.99-2.92-3.05-2.89-2.93-3.09-3.29
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)
FEEDBACK