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Lydall Inc (NYSE:LDL)
Beneish M-Score
-2.92 (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 -2.92 suggests that the company is not a manipulator.

LDL' s 10-Year Beneish M-Score Range
Min: -3.18   Max: -2.02
Current: -2.92

-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 * 0.7137+0.528 * 0.9805+0.404 * 0.842+0.892 * 1.2682+0.115 * 0.7193
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.047+4.679 * -0.073-0.327 * 0.8886
=-2.92

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was 18.937 + 5.733 + 4.158 + 8.24 = $37.1 Mil.
Non Operating Income was 19.669 + 0.547 + 0.508 + -0.299 = $20.4 Mil.
Cash Flow from Operations was -1.097 + 11.129 + 17.125 + 16.234 = $43.4 Mil.
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 $13.2 Mil.
Selling, General & Admin. Expense(SGA) was $60.2 Mil.
Total Current Liabilities was $72.3 Mil.
Long-Term Debt was $60.9 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)
=(91.252 / 537.909) / (100.828 / 424.166)
=0.16964208 / 0.23770882
=0.7137

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)
=(25.562 / 424.166) / (27.7 / 537.909)
=0.21232018 / 0.21654034
=0.9805

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 - (228.626 + 110.289) / 366.556) / (1 - (217.15 + 116.653) / 366.64)
=0.0754073 / 0.08956197
=0.842

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
=537.909 / 424.166
=1.2682

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))
=(13.206 / (13.206 + 116.653)) / (18.16 / (18.16 + 110.289))
=0.10169492 / 0.14137907
=0.7193

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)
=(79.979 / 537.909) / (60.237 / 424.166)
=0.148685 / 0.1420128
=1.047

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)
=((40.146 + 78.201) / 366.556) / ((60.881 + 72.339) / 366.64)
=0.32286199 / 0.3633537
=0.8886

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
=(37.068 - 20.425 - 43.391) / 366.556
=-0.073

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 -2.92 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00380.91790.98560.72671.42390.93240.82721.01721.04871.1981
GMI 0.93950.93640.98681.09741.55140.77810.96820.85710.95880.998
AQI 0.97390.95960.88751.01060.85510.86350.90760.87610.90561.0669
SGI 1.04390.99881.04830.95260.81431.26981.21350.98781.05031.3464
DEPI 1.02051.00841.03930.91870.93041.03570.90571.02571.08911.0457
SGAI 0.94210.97290.99951.00721.13470.82020.82481.09460.94011.0636
LVGI 0.93280.76510.9720.84121.11431.21590.82760.95220.95031.7311
TATA -0.057-0.1223-0.0509-0.1072-0.1277-0.0353-0.0041-0.0697-0.0403-0.0566
M-score -2.71-3.10-2.73-3.18-2.69-2.67-2.45-2.92-2.60-2.47

Lydall Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.01720.96010.98081.06681.04871.59921.45461.10111.19810.7137
GMI 0.85710.86580.9150.96880.95880.98760.97690.97960.9980.9805
AQI 0.87610.87030.8880.88660.90561.00670.9971.02451.06690.842
SGI 0.98781.00671.01951.02841.05031.11271.22661.30781.34641.2682
DEPI 1.02571.0051.00191.03321.08911.49121.31041.13631.04570.7193
SGAI 1.09461.07781.05821.00470.94010.93590.9721.05751.06361.047
LVGI 0.95220.91490.91440.90970.95031.84071.84341.84611.73110.8886
TATA -0.0697-0.0508-0.0441-0.0314-0.0403-0.0332-0.0428-0.0792-0.0566-0.073
M-score -2.92-2.86-2.76-2.57-2.60-2.19-2.31-2.75-2.47-2.92
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