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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.
During the past 13 years, the highest Beneish M-Score of Lydall Inc was -2.01. The lowest was -3.18. And the median was -2.63.
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 * 1.1637||+||0.528 * 0.9556||+||0.404 * 3.0665||+||0.892 * 1.0807||+||0.115 * 1.2094|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1067||+||4.679 * -0.064||-||0.327 * 1.8309|
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was USD 103.3 Mil.|
Revenue was 144.192 + 155.725 + 137.235 + 129.7 = USD 566.9 Mil.
Gross Profit was 31.982 + 38.193 + 35.99 + 32.377 = USD 138.5 Mil.
Total Current Assets was USD 255.6 Mil.
Total Assets was USD 527.0 Mil.
Property, Plant and Equipment(Net PPE) was USD 160.8 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 19.6 Mil.
Selling, General & Admin. Expense(SGA) was USD 83.8 Mil.
Total Current Liabilities was USD 90.4 Mil.
Long-Term Debt was USD 128.1 Mil.
Net Income was 4.42 + 12.785 + 10.813 + 9.169 = USD 37.2 Mil.
Non Operating Income was 0.331 + 0.218 + 0.499 + 0.167 = USD 1.2 Mil.
Cash Flow from Operations was 22.305 + 14.015 + 20.624 + 12.783 = USD 69.7 Mil.
|Accounts Receivable was USD 82.1 Mil.
Revenue was 131.398 + 131.24 + 134.561 + 127.306 = USD 524.5 Mil.
Gross Profit was 29.217 + 31.691 + 33.889 + 27.7 = USD 122.5 Mil.
Total Current Assets was USD 219.3 Mil.
Total Assets was USD 358.3 Mil.
Property, Plant and Equipment(Net PPE) was USD 114.4 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 17.3 Mil.
Selling, General & Admin. Expense(SGA) was USD 70.0 Mil.
Total Current Liabilities was USD 61.0 Mil.
Long-Term Debt was USD 20.2 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(103.316 / 566.852)||/||(82.149 / 524.505)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(122.497 / 524.505)||/||(138.542 / 566.852)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (255.606 + 160.795) / 527.029)||/||(1 - (219.303 + 114.433) / 358.26)|
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.
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))|
|=||(17.275 / (17.275 + 114.433))||/||(19.559 / (19.559 + 160.795))|
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)|
|=||(83.75 / 566.852)||/||(70.02 / 524.505)|
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)|
|=||((128.141 + 90.444) / 527.029)||/||((20.156 + 61) / 358.26)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(37.187 - 1.215||-||69.727)||/||527.029|
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 -2.01 signals that the company is likely to be a manipulator.
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
Lydall Inc Annual Data
Lydall Inc Quarterly Data