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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 Lee Enterprises Inc was -1.17. The lowest was -5.98. And the median was -2.85.
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 * 0.9809||+||0.528 * 0.9911||+||0.404 * 1.0038||+||0.892 * 0.9447||+||0.115 * 0.9486|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0146||+||4.679 * -0.0857||-||0.327 * 0.9352|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $53.5 Mil.|
Revenue was 150.946 + 146.835 + 168.405 + 156.099 = $622.3 Mil.
Gross Profit was 144.342 + 140.782 + 161.72 + 149.764 = $596.6 Mil.
Total Current Assets was $86.3 Mil.
Total Assets was $715.2 Mil.
Property, Plant and Equipment(Net PPE) was $134.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.9 Mil.
Selling, General & Admin. Expense(SGA) was $232.1 Mil.
Total Current Liabilities was $111.2 Mil.
Long-Term Debt was $609.3 Mil.
Net Income was 4.092 + 19.228 + 11.237 + 9.881 = $44.4 Mil.
Non Operating Income was -1.609 + 29.3 + -0.688 + 4.598 = $31.6 Mil.
Cash Flow from Operations was 24.276 + 20.482 + 21.069 + 8.327 = $74.2 Mil.
|Accounts Receivable was $57.7 Mil.
Revenue was 158.678 + 156.557 + 177.21 + 166.274 = $658.7 Mil.
Gross Profit was 151.257 + 148.896 + 168.364 + 157.4 = $625.9 Mil.
Total Current Assets was $91.9 Mil.
Total Assets was $772.6 Mil.
Property, Plant and Equipment(Net PPE) was $148.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.2 Mil.
Selling, General & Admin. Expense(SGA) was $242.2 Mil.
Total Current Liabilities was $120.0 Mil.
Long-Term Debt was $712.1 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)|
|=||(53.476 / 622.285)||/||(57.712 / 658.719)|
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)|
|=||(625.917 / 658.719)||/||(596.608 / 622.285)|
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 - (86.333 + 134.378) / 715.222)||/||(1 - (91.905 + 148.515) / 772.598)|
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))|
|=||(45.22 / (45.22 + 148.515))||/||(43.858 / (43.858 + 134.378))|
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)|
|=||(232.146 / 622.285)||/||(242.201 / 658.719)|
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)|
|=||((609.29 + 111.173) / 715.222)||/||((712.1 + 120.045) / 772.598)|
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|
|=||(44.438 - 31.601||-||74.154)||/||715.222|
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 -2.94 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