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Lydall Inc (NYSE:LDL)
Beneish M-Score
-2.19 (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 -2.19 signals that the company is a manipulator.

LDL' s 10-Year Beneish M-Score Range
Min: -3.14   Max: -2.02
Current: -2.19

-3.14
-2.02

During the past 13 years, the highest Beneish M-Score of Lydall Inc was -2.02. The lowest was -3.14. And the median was -2.65.


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 * 1.5992+0.528 * 0.9876+0.404 * 1.0067+0.892 * 1.1127+0.115 * 1.5025
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9359+4.679 * -0.0332-0.327 * 1.8407
=-2.19

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $100.8 Mil.
Revenue was 125.226 + 99.894 + 97.995 + 101.051 = $424.2 Mil.
Gross Profit was 26.199 + 20.329 + 20.494 + 23.037 = $90.1 Mil.
Total Current Assets was $217.2 Mil.
Total Assets was $366.6 Mil.
Property, Plant and Equipment(Net PPE) was $116.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.1 Mil.
Selling, General & Admin. Expense(SGA) was $60.2 Mil.
Total Current Liabilities was $72.3 Mil.
Long-Term Debt was $60.9 Mil.
Net Income was 3.716 + 4.133 + 4.575 + 5.955 = $18.4 Mil.
Non Operating Income was -0.055 + -0.023 + 0.016 + -0.018 = $-0.1 Mil.
Cash Flow from Operations was -2.86 + 19.372 + 4.428 + 9.697 = $30.6 Mil.
Accounts Receivable was $56.7 Mil.
Revenue was 99.029 + 90.468 + 94.167 + 97.535 = $381.2 Mil.
Gross Profit was 21.365 + 17.304 + 19.269 + 21.993 = $79.9 Mil.
Total Current Assets was $161.1 Mil.
Total Assets was $258.9 Mil.
Property, Plant and Equipment(Net PPE) was $74.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.4 Mil.
Selling, General & Admin. Expense(SGA) was $57.8 Mil.
Total Current Liabilities was $49.7 Mil.
Long-Term Debt was $1.4 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)
=(100.828 / 424.166) / (56.661 / 381.199)
=0.23770882 / 0.1486389
=1.5992

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)
=(20.329 / 381.199) / (26.199 / 424.166)
=0.20968313 / 0.21232018
=0.9876

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 - (217.15 + 116.653) / 366.64) / (1 - (161.141 + 74.697) / 258.869)
=0.08956197 / 0.08896778
=1.0067

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
=424.166 / 381.199
=1.1127

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))
=(13.353 / (13.353 + 74.697)) / (13.096 / (13.096 + 116.653))
=0.15165247 / 0.10093334
=1.5025

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)
=(60.237 / 424.166) / (57.843 / 381.199)
=0.1420128 / 0.15173964
=0.9359

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)
=((60.881 + 72.339) / 366.64) / ((1.449 + 49.651) / 258.869)
=0.3633537 / 0.19739714
=1.8407

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
=(18.379 - -0.08 - 30.637) / 366.64
=-0.0332

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 -2.19 signals that the company is likely to 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 1.12070.99460.91160.98560.7691.50310.86780.80571.02491.0599
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 -2.61-2.72-3.10-2.73-3.14-2.62-2.73-2.47-2.92-2.59

Lydall Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.81630.82290.95871.05891.02490.96010.98081.06681.05991.5992
GMI 0.96640.92990.87590.82830.85710.86580.9150.96880.95880.9876
AQI 0.90760.91340.91360.89580.87610.87030.8880.88660.90561.0067
SGI 1.19781.09331.02520.98360.98781.00671.01951.02841.05031.1127
DEPI 0.90570.92981.01351.08351.02571.0051.00191.03321.09731.5025
SGAI 0.82580.9250.99091.04931.09461.07781.05821.00470.94010.9359
LVGI 0.82760.8490.9270.91850.95220.91490.91440.90970.95031.8407
TATA -0.0041-0.0107-0.0292-0.0592-0.0697-0.0508-0.0441-0.0314-0.0403-0.0332
M-score -2.47-2.63-2.71-2.82-2.92-2.86-2.76-2.57-2.59-2.19
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