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Lydall Inc (NYSE:LDL)
Beneish M-Score
-2.59 (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.

Lydall Inc has a M-score of -2.59 suggests that the company is not a manipulator.

LDL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.18   Max: -2.14
Current: -2.59

-3.18
-2.14

During the past 13 years, the highest Beneish M-Score of Lydall Inc was -2.14. The lowest was -3.18. And the median was -2.66.


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 Lydall Inc 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 * 1.0436+0.528 * 0.8972+0.404 * 0.8802+0.892 * 0.9795+0.115 * 1.1033
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9075+4.679 * -0.0366-0.327 * 0.6634
=-2.59

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $93.3 Mil.
Revenue was 129.7 + 131.398 + 131.24 + 134.561 = $526.9 Mil.
Gross Profit was 32.377 + 29.217 + 31.691 + 33.889 = $127.2 Mil.
Total Current Assets was $221.6 Mil.
Total Assets was $363.0 Mil.
Property, Plant and Equipment(Net PPE) was $117.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.2 Mil.
Selling, General & Admin. Expense(SGA) was $71.1 Mil.
Total Current Liabilities was $67.6 Mil.
Long-Term Debt was $10.1 Mil.
Net Income was 9.169 + 5.319 + 11.186 + 10.817 = $36.5 Mil.
Non Operating Income was 0.167 + 0.035 + 0.15 + -0.553 = $-0.2 Mil.
Cash Flow from Operations was 12.783 + 21.213 + 10.402 + 5.592 = $50.0 Mil.
Accounts Receivable was $91.3 Mil.
Revenue was 127.306 + 127.583 + 134.227 + 148.793 = $537.9 Mil.
Gross Profit was 27.7 + 25.562 + 28.564 + 34.653 = $116.5 Mil.
Total Current Assets was $228.6 Mil.
Total Assets was $366.6 Mil.
Property, Plant and Equipment(Net PPE) was $110.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $80.0 Mil.
Total Current Liabilities was $78.2 Mil.
Long-Term Debt was $40.1 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)
=(93.279 / 526.899) / (91.252 / 537.909)
=0.17703393 / 0.16964208
=1.0436

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)
=(29.217 / 537.909) / (32.377 / 526.899)
=0.21654034 / 0.24136315
=0.8972

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 - (221.555 + 117.331) / 362.977) / (1 - (228.626 + 110.289) / 366.556)
=0.0663706 / 0.0754073
=0.8802

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
=526.899 / 537.909
=0.9795

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))
=(18.16 / (18.16 + 110.289)) / (17.245 / (17.245 + 117.331))
=0.14137907 / 0.12814321
=1.1033

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)
=(71.096 / 526.899) / (79.979 / 537.909)
=0.13493288 / 0.148685
=0.9075

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)
=((10.145 + 67.605) / 362.977) / ((40.146 + 78.201) / 366.556)
=0.2142009 / 0.32286199
=0.6634

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
=(36.491 - -0.201 - 49.99) / 362.977
=-0.0366

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.

Lydall Inc has a M-score of -2.59 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.

Lydall Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.8610.9950.76751.42390.8720.88451.01721.04871.19810.9947
GMI 0.9350.99291.09231.53010.78510.97290.85710.95880.9980.9188
AQI 0.95960.88751.01060.85510.86350.90760.87610.90561.06690.748
SGI 1.06481.03840.90210.81431.35771.13490.98781.05031.34640.9789
DEPI 1.00841.03930.91870.93891.02630.90571.02571.09731.03781.0115
SGAI 0.95931.00721.01361.13470.80890.83631.09460.94011.06360.8839
LVGI 0.76510.9720.84121.11431.21590.82760.95220.95031.73110.7227
TATA -0.1223-0.0509-0.1072-0.1268-0.046-0.0041-0.0697-0.0403-0.0566-0.0255
M-score -3.09-2.73-3.19-2.70-2.70-2.46-2.92-2.60-2.47-2.66

Lydall Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.04871.59921.45461.10111.19810.71370.83350.9760.99471.0436
GMI 0.95880.98760.97690.97960.9980.98050.97510.94630.91880.8972
AQI 0.90561.00670.9971.02451.06690.8420.83930.8450.7480.8802
SGI 1.05031.11271.22661.30781.34641.26821.10971.02470.97890.9795
DEPI 1.09661.50171.31971.14461.04570.71930.82930.92211.01151.1033
SGAI 0.94010.93590.9721.05751.06361.0470.97920.85580.88390.9075
LVGI 0.95031.84071.84341.84611.73110.88860.82980.84160.72270.6634
TATA -0.0403-0.0332-0.0428-0.0792-0.0566-0.073-0.03540.0022-0.0255-0.0366
M-score -2.60-2.19-2.31-2.75-2.47-2.92-2.74-2.49-2.66-2.59
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