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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.
Lee Enterprises Inc has a M-score of -3.50 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Lee Enterprises Inc was -1.20. The lowest was -6.36. And the median was -2.84.
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 * 1.0148||+||0.528 * 0.9962||+||0.404 * 0.9388||+||0.892 * 0.9499||+||0.115 * 1.1277|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9657||+||4.679 * -0.1998||-||0.327 * 1.1444|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $61.6 Mil.|
Revenue was 163.125 + 154.093 + 177.385 + 162.463 = $657.1 Mil.
Gross Profit was 153.901 + 144.759 + 166.616 + 152.339 = $617.6 Mil.
Total Current Assets was $96.9 Mil.
Total Assets was $828.2 Mil.
Property, Plant and Equipment(Net PPE) was $160.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.3 Mil.
Selling, General & Admin. Expense(SGA) was $244.7 Mil.
Total Current Liabilities was $122.9 Mil.
Long-Term Debt was $785.6 Mil.
Net Income was -9.746 + 1.486 + 11.892 + -88.689 = $-85.1 Mil.
Non Operating Income was -23.433 + -0.072 + -0.01 + 0.334 = $-23.2 Mil.
Cash Flow from Operations was 34.838 + 22.752 + 11.993 + 34.015 = $103.6 Mil.
|Accounts Receivable was $63.9 Mil.
Revenue was 167.019 + 160.603 + 184.656 + 179.444 = $691.7 Mil.
Gross Profit was 156.548 + 149.891 + 171.679 + 169.58 = $647.7 Mil.
Total Current Assets was $88.8 Mil.
Total Assets was $989.0 Mil.
Property, Plant and Equipment(Net PPE) was $174.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $60.2 Mil.
Selling, General & Admin. Expense(SGA) was $266.8 Mil.
Total Current Liabilities was $100.7 Mil.
Long-Term Debt was $847.4 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)|
|=||(61.577 / 657.066)||/||(63.881 / 691.722)|
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)|
|=||(144.759 / 691.722)||/||(153.901 / 657.066)|
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 - (96.914 + 160.874) / 828.17)||/||(1 - (88.796 + 174.682) / 989.03)|
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))|
|=||(60.16 / (60.16 + 174.682))||/||(47.289 / (47.289 + 160.874))|
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)|
|=||(244.708 / 657.066)||/||(266.778 / 691.722)|
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)|
|=||((785.6 + 122.899) / 828.17)||/||((847.385 + 100.671) / 989.03)|
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|
|=||(-85.057 - -23.181||-||103.598)||/||828.17|
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 -3.50 suggests that the company will not 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
Lee Enterprises Inc Annual Data
Lee Enterprises Inc Quarterly Data