Switch to:
GuruFocus has detected 2 Warning Signs with Lee Enterprises Inc $LEE.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Lee Enterprises Inc (NYSE:LEE)
Beneish M-Score
-3.01 (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 -3.01 suggests that the company is not a manipulator.

LEE' s Beneish M-Score Range Over the Past 10 Years
Min: -5.25   Max: -2.21
Current: -3.01

-5.25
-2.21

During the past 13 years, the highest Beneish M-Score of Lee Enterprises Inc was -2.21. The lowest was -5.25. And the median was -2.82.


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 * 0.92+0.528 * 0.9956+0.404 * 1.0059+0.892 * 0.9473+0.115 * 0.9528
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0147+4.679 * -0.0903-0.327 * 0.9303
=-3.01

* 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 $51.3 Mil.
Revenue was 148.178 + 150.946 + 146.835 + 168.405 = $614.4 Mil.
Gross Profit was 141.411 + 144.342 + 140.782 + 161.72 = $588.3 Mil.
Total Current Assets was $77.3 Mil.
Total Assets was $689.1 Mil.
Property, Plant and Equipment(Net PPE) was $128.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $43.4 Mil.
Selling, General & Admin. Expense(SGA) was $229.8 Mil.
Total Current Liabilities was $99.0 Mil.
Long-Term Debt was $592.1 Mil.
Net Income was 0.404 + 4.092 + 19.228 + 11.237 = $35.0 Mil.
Non Operating Income was -8.972 + -1.609 + 29.3 + -0.688 = $18.0 Mil.
Cash Flow from Operations was 13.363 + 24.276 + 20.482 + 21.069 = $79.2 Mil.
Accounts Receivable was $58.9 Mil.
Revenue was 156.099 + 158.678 + 156.557 + 177.21 = $648.5 Mil.
Gross Profit was 149.764 + 151.257 + 148.896 + 168.364 = $618.3 Mil.
Total Current Assets was $82.7 Mil.
Total Assets was $747.8 Mil.
Property, Plant and Equipment(Net PPE) was $143.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.6 Mil.
Selling, General & Admin. Expense(SGA) was $239.0 Mil.
Total Current Liabilities was $105.3 Mil.
Long-Term Debt was $700.9 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)
=(51.334 / 614.364) / (58.899 / 648.544)
=0.08355633 / 0.09081728
=0.92

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)
=(618.281 / 648.544) / (588.255 / 614.364)
=0.95333701 / 0.95750239
=0.9956

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 - (77.253 + 128.562) / 689.126) / (1 - (82.664 + 143.769) / 747.825)
=0.70133909 / 0.69721125
=1.0059

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
=614.364 / 648.544
=0.9473

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))
=(45.563 / (45.563 + 143.769)) / (43.441 / (43.441 + 128.562))
=0.24065134 / 0.25255955
=0.9528

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)
=(229.752 / 614.364) / (239.028 / 648.544)
=0.37396722 / 0.36856096
=1.0147

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)
=((592.097 + 99.018) / 689.126) / ((700.872 + 105.281) / 747.825)
=1.00288626 / 1.07799686
=0.9303

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
=(34.961 - 18.031 - 79.19) / 689.126
=-0.0903

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 -3.01 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.

Lee Enterprises Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 1.02970.91460.97051.09440.92481.00270.97071.01140.96270.92
GMI 1.01220.70930.98340.9821.00880.99550.99050.99290.98860.9957
AQI 1.00350.91670.96151.00470.94191.00370.94221.02631.01411.0059
SGI 0.99910.91240.81840.88890.96630.97750.95880.97510.98130.9473
DEPI 0.95450.94321.0210.99280.91440.98031.05371.05150.97910.9528
SGAI 1.01621.04440.98240.99580.98430.98370.96850.97821.00211.0147
LVGI 0.95581.51971.13250.97671.14451.0221.16020.98160.98040.9303
TATA -0.0815-0.4987-0.1198-0.0357-0.205-0.0514-0.2122-0.0683-0.0692-0.0903
M-score -2.82-5.34-3.29-2.66-3.61-2.75-3.61-2.79-2.85-3.01

Lee Enterprises Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.01011.01140.95020.97240.93920.96270.95560.92160.98090.92
GMI 0.99550.99170.9920.99070.98980.98860.98850.98940.99110.9956
AQI 0.93881.02631.01551.02241.00011.01411.01811.01051.00381.0059
SGI 0.95430.97510.98540.99880.99790.98130.96830.950.94470.9473
DEPI 1.12771.05151.0240.99370.95180.97910.97090.95960.96990.9528
SGAI 0.96750.98120.98491.0011.00281.00421.00471.00471.01461.0147
LVGI 1.14440.98160.97360.97490.98180.98040.97970.93950.93520.9303
TATA -0.2005-0.0683-0.081-0.0777-0.0798-0.0692-0.0682-0.0906-0.0857-0.0903
M-score -3.50-2.79-2.90-2.86-2.92-2.85-2.86-3.01-2.94-3.01
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK