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Lydall Inc (NYSE:LDL)
Beneish M-Score
-2.75 (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 -2.75 suggests that the company is not a manipulator.

LDL' s 10-Year Beneish M-Score Range
Min: -3.18   Max: -2.02
Current: -2.75

-3.18
-2.02

During the past 13 years, the highest Beneish M-Score of Lydall Inc was -2.02. The lowest was -3.18. And the median was -2.67.


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 * 1.1011+0.528 * 0.9796+0.404 * 1.0245+0.892 * 1.3078+0.115 * 1.143
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0575+4.679 * -0.0792-0.327 * 1.8461
=-2.75

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $91.7 Mil.
Revenue was 134.227 + 148.793 + 125.226 + 99.894 = $508.1 Mil.
Gross Profit was 28.564 + 34.653 + 26.199 + 20.329 = $109.7 Mil.
Total Current Assets was $229.3 Mil.
Total Assets was $375.5 Mil.
Property, Plant and Equipment(Net PPE) was $113.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.2 Mil.
Selling, General & Admin. Expense(SGA) was $78.5 Mil.
Total Current Liabilities was $71.0 Mil.
Long-Term Debt was $60.5 Mil.
Net Income was 4.158 + 8.24 + 3.716 + 4.133 = $20.2 Mil.
Non Operating Income was 0.508 + -0.299 + -0.055 + -0.023 = $0.1 Mil.
Cash Flow from Operations was 17.125 + 16.234 + -2.86 + 19.372 = $49.9 Mil.
Accounts Receivable was $63.7 Mil.
Revenue was 97.995 + 101.051 + 99.029 + 90.468 = $388.5 Mil.
Gross Profit was 20.494 + 23.037 + 21.365 + 17.304 = $82.2 Mil.
Total Current Assets was $172.5 Mil.
Total Assets was $272.8 Mil.
Property, Plant and Equipment(Net PPE) was $77.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.8 Mil.
Selling, General & Admin. Expense(SGA) was $56.7 Mil.
Total Current Liabilities was $50.5 Mil.
Long-Term Debt was $1.2 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)
=(91.741 / 508.14) / (63.708 / 388.543)
=0.18054276 / 0.16396641
=1.1011

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)
=(34.653 / 388.543) / (28.564 / 508.14)
=0.2115596 / 0.21597394
=0.9796

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 - (229.266 + 113.71) / 375.548) / (1 - (172.54 + 77.152) / 272.785)
=0.08673192 / 0.08465641
=1.0245

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
=508.14 / 388.543
=1.3078

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))
=(12.812 / (12.812 + 77.152)) / (16.184 / (16.184 + 113.71))
=0.14241252 / 0.1245939
=1.143

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)
=(78.478 / 508.14) / (56.743 / 388.543)
=0.15444169 / 0.14604046
=1.0575

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)
=((60.488 + 70.989) / 375.548) / ((1.201 + 50.531) / 272.785)
=0.35009373 / 0.18964386
=1.8461

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
=(20.247 - 0.131 - 49.871) / 375.548
=-0.0792

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 -2.75 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.13411.00380.91790.98560.72671.42390.93240.82721.01721.0487
GMI 1.20690.93950.93640.98681.09741.55140.77810.96820.85710.9588
AQI 1.01640.97390.95960.88751.01060.85510.86350.90760.87610.9056
SGI 1.07851.04390.99881.04830.95260.81431.26981.21350.98781.0503
DEPI 0.98151.02051.00841.03930.91870.93041.03570.90571.02571.0973
SGAI 1.04960.94210.97290.99951.00721.13470.82020.82481.09460.9401
LVGI 1.23130.93280.76510.9720.84121.11431.21590.82760.95220.9503
TATA -0.0724-0.057-0.1223-0.0509-0.1072-0.1277-0.0353-0.0041-0.0697-0.0403
M-score -2.60-2.71-3.10-2.73-3.18-2.69-2.67-2.45-2.92-2.60

Lydall Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.96851.06871.01720.96010.98081.06681.04871.59921.45461.1011
GMI 0.87590.82830.85710.86580.9150.96880.95880.98760.97690.9796
AQI 0.91360.89580.87610.87030.8880.88660.90561.00670.9971.0245
SGI 1.02520.98360.98781.00671.01951.02841.05031.11271.22661.3078
DEPI 1.01351.08351.02571.0051.00191.03321.09731.50251.31911.143
SGAI 0.99091.04931.09461.07781.05821.00470.94010.93590.9721.0575
LVGI 0.9270.91850.95220.91490.91440.90970.95031.84071.84341.8461
TATA -0.0292-0.0592-0.0697-0.0508-0.0441-0.0314-0.0403-0.0332-0.0428-0.0792
M-score -2.70-2.81-2.92-2.86-2.76-2.57-2.60-2.19-2.31-2.75
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