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Lee Enterprises Inc (NYSE:LEE)
Beneish M-Score
-2.62 (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.

Lee Enterprises Inc has a M-score of -2.62 suggests that the company is not a manipulator.

LEE' s 10-Year Beneish M-Score Range
Min: -5.25   Max: -2.22
Current: -2.62

-5.25
-2.22

During the past 13 years, the highest Beneish M-Score of Lee Enterprises Inc was -2.22. The lowest was -5.25. And the median was -2.76.


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 Lee Enterprises 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 * 1.0133+0.528 * 0.9917+0.404 * 1.0263+0.892 * 0.9733+0.115 * 1.0743
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9767+4.679 * -0.0335-0.327 * 0.9816
=-2.62

* 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 $62.3 Mil.
Revenue was 162.094 + 163.125 + 154.093 + 177.385 = $656.7 Mil.
Gross Profit was 153.22 + 153.901 + 144.759 + 166.823 = $618.7 Mil.
Total Current Assets was $96.1 Mil.
Total Assets was $811.3 Mil.
Property, Plant and Equipment(Net PPE) was $157.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.2 Mil.
Selling, General & Admin. Expense(SGA) was $244.0 Mil.
Total Current Liabilities was $118.7 Mil.
Long-Term Debt was $773.4 Mil.
Net Income was 3.162 + -9.746 + 1.486 + 12.102 = $7.0 Mil.
Non Operating Income was 3.694 + -23.433 + -0.072 + -28.1 = $-47.9 Mil.
Cash Flow from Operations was 12.492 + 34.838 + 22.752 + 11.993 = $82.1 Mil.
Accounts Receivable was $63.2 Mil.
Revenue was 162.462 + 167.019 + 160.603 + 184.656 = $674.7 Mil.
Gross Profit was 152.339 + 156.548 + 149.891 + 171.679 = $630.5 Mil.
Total Current Assets was $104.3 Mil.
Total Assets was $827.7 Mil.
Property, Plant and Equipment(Net PPE) was $168.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $55.6 Mil.
Selling, General & Admin. Expense(SGA) was $256.7 Mil.
Total Current Liabilities was $107.0 Mil.
Long-Term Debt was $820.2 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)
=(62.343 / 656.697) / (63.215 / 674.74)
=0.09493419 / 0.09368794
=1.0133

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)
=(153.901 / 674.74) / (153.22 / 656.697)
=0.93437028 / 0.94214379
=0.9917

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 - (96.135 + 157.371) / 811.275) / (1 - (104.325 + 168.913) / 827.705)
=0.68752149 / 0.6698848
=1.0263

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
=656.697 / 674.74
=0.9733

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))
=(55.637 / (55.637 + 168.913)) / (47.173 / (47.173 + 157.371))
=0.2477711 / 0.2306252
=1.0743

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)
=(244.021 / 656.697) / (256.707 / 674.74)
=0.37158842 / 0.38045321
=0.9767

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)
=((773.35 + 118.708) / 811.275) / ((820.187 + 106.991) / 827.705)
=1.09957536 / 1.12017929
=0.9816

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
=(7.004 - -47.911 - 82.075) / 811.275
=-0.0335

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.

Lee Enterprises Inc has a M-score of -2.62 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.

Lee Enterprises Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.62670.69351.02970.91460.97051.09440.91961.00830.9751.0133
GMI 1.00981.03841.01220.70930.98340.9821.00890.99550.99080.993
AQI 1.0690.99861.00350.91670.96151.00470.94191.00370.94221.0263
SGI 1.19841.37830.99910.91240.81840.88890.97180.9720.95450.9733
DEPI 1.3640.670.95450.94321.0210.99280.90660.98881.05371.0743
SGAI 1.03930.91921.01621.04440.98240.99580.98580.99890.96680.9748
LVGI 2.47240.94870.95581.51971.13250.97671.14451.0221.16020.9816
TATA -0.0246-0.0426-0.0316-0.4983-0.1198-0.0357-0.205-0.0511-0.2115-0.0687
M-score -2.25-2.61-2.59-5.34-3.29-2.66-3.61-2.75-3.60-2.79

Lee Enterprises Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02171.0070.93510.95640.91160.97631.04381.04641.01481.0133
GMI 0.99230.99580.99460.99430.98940.9920.99030.99130.99580.9917
AQI 1.00561.00371.04451.01541.01660.94220.92910.93110.93881.0263
SGI 0.93410.97320.98420.99831.01420.95320.95290.9490.94990.9733
DEPI 0.98080.98880.97150.97310.97641.05371.07131.09541.12771.0743
SGAI 0.97890.99871.0031.00470.99570.96330.96350.95870.96460.9767
LVGI 1.03221.02210.69420.99880.99811.16021.16171.15471.14440.9816
TATA -0.0675-0.0538-0.0569-0.062-0.0619-0.2115-0.1657-0.1568-0.1656-0.0335
M-score -2.85-2.76-5.98-2.81-2.84-3.60-3.33-3.28-3.34-2.62
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