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Lydall Inc (NYSE:LDL)
Beneish M-Score
-2.25 (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 -2.25 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: -2.25

-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 * 1.1296+0.528 * 0.9314+0.404 * 2.1178+0.892 * 1.0641+0.115 * 1.2435
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0617+4.679 * -0.0645-0.327 * 1.2416
=-2.25

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $110.3 Mil.
Revenue was 155.725 + 137.235 + 129.7 + 131.398 = $554.1 Mil.
Gross Profit was 38.193 + 35.99 + 32.377 + 29.217 = $135.8 Mil.
Total Current Assets was $262.6 Mil.
Total Assets was $488.1 Mil.
Property, Plant and Equipment(Net PPE) was $149.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.4 Mil.
Selling, General & Admin. Expense(SGA) was $77.8 Mil.
Total Current Liabilities was $83.4 Mil.
Long-Term Debt was $95.1 Mil.
Net Income was 12.785 + 10.813 + 9.169 + 5.319 = $38.1 Mil.
Non Operating Income was 0.218 + 0.499 + 0.167 + 0.035 = $0.9 Mil.
Cash Flow from Operations was 14.015 + 20.624 + 12.783 + 21.213 = $68.6 Mil.
Accounts Receivable was $91.8 Mil.
Revenue was 131.24 + 134.561 + 127.306 + 127.583 = $520.7 Mil.
Gross Profit was 31.691 + 33.889 + 27.7 + 25.562 = $118.8 Mil.
Total Current Assets was $244.3 Mil.
Total Assets was $383.3 Mil.
Property, Plant and Equipment(Net PPE) was $110.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.4 Mil.
Selling, General & Admin. Expense(SGA) was $68.8 Mil.
Total Current Liabilities was $72.9 Mil.
Long-Term Debt was $40.0 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)
=(110.286 / 554.058) / (91.754 / 520.69)
=0.19905136 / 0.17621617
=1.1296

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)
=(118.842 / 520.69) / (135.777 / 554.058)
=0.22823945 / 0.24505918
=0.9314

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 - (262.645 + 149.692) / 488.099) / (1 - (244.328 + 110.843) / 383.261)
=0.15521851 / 0.07329209
=2.1178

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
=554.058 / 520.69
=1.0641

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))
=(17.437 / (17.437 + 110.843)) / (18.371 / (18.371 + 149.692))
=0.13592922 / 0.1093102
=1.2435

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)
=(77.75 / 554.058) / (68.824 / 520.69)
=0.14032827 / 0.13217846
=1.0617

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)
=((95.125 + 83.446) / 488.099) / ((40.003 + 72.926) / 383.261)
=0.36584996 / 0.29465299
=1.2416

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
=(38.086 - 0.919 - 68.635) / 488.099
=-0.0645

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 -2.25 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 local exchange's currency.

Lydall Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.91790.98560.72671.42390.93240.82721.01721.04871.19810.9947
GMI 0.93640.98681.09741.55140.77810.96820.85710.95880.9980.9188
AQI 0.95960.88751.01060.85510.86350.90760.87610.90561.06690.748
SGI 0.99881.04830.95260.81431.26981.21350.98781.05031.34640.9789
DEPI 1.00841.03930.91870.93041.03570.90571.01871.09661.04571.0115
SGAI 0.97290.99951.00721.13470.82020.82481.09460.94011.06360.8839
LVGI 0.76510.9720.84121.11431.21590.82760.95220.95031.73110.7227
TATA -0.1223-0.0509-0.1072-0.1287-0.0353-0.0041-0.0697-0.0403-0.0566-0.0255
M-score -3.10-2.73-3.18-2.69-2.67-2.45-2.93-2.60-2.47-2.66

Lydall Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.45461.10111.19810.71370.83350.9760.99471.04360.9761.1296
GMI 0.97690.97960.9980.98050.97510.94630.91880.89720.90520.9314
AQI 0.9971.02451.06690.8420.83930.8450.7480.88020.87072.1178
SGI 1.22661.30781.34641.26821.10971.02470.97890.97951.01131.0641
DEPI 1.31911.1431.03780.71390.82380.91661.01151.10331.07431.2435
SGAI 0.9721.05751.06361.0470.97920.85580.88390.90750.98811.0617
LVGI 1.84341.84611.73110.88860.82980.84160.72270.66340.7311.2416
TATA -0.0428-0.0792-0.0566-0.073-0.03540.0022-0.0255-0.0366-0.0787-0.0645
M-score -2.31-2.75-2.47-2.92-2.74-2.49-2.66-2.59-2.86-2.25
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