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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 -1.20. The lowest was -5.98. And the median was -2.81.
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 * 0.9772||+||0.528 * 0.9909||+||0.404 * 1.0224||+||0.892 * 0.9939||+||0.115 * 1.0158|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0059||+||4.679 * -0.0782||-||0.327 * 0.9749|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $59.6 Mil.|
Revenue was 155.529 + 176.154 + 162.094 + 163.125 = $656.9 Mil.
Gross Profit was 147.868 + 167.308 + 153.22 + 153.901 = $622.3 Mil.
Total Current Assets was $85.8 Mil.
Total Assets was $779.6 Mil.
Property, Plant and Equipment(Net PPE) was $153.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $46.0 Mil.
Selling, General & Admin. Expense(SGA) was $244.5 Mil.
Total Current Liabilities was $106.0 Mil.
Long-Term Debt was $736.9 Mil.
Net Income was 1.8 + 9.753 + 3.163 + -9.746 = $5.0 Mil.
Non Operating Income was 0.825 + -2.28 + 4 + -23.433 = $-20.9 Mil.
Cash Flow from Operations was 17.175 + 22.29 + 12.492 + 34.838 = $86.8 Mil.
|Accounts Receivable was $61.3 Mil.
Revenue was 154.093 + 177.385 + 162.463 + 167.019 = $661.0 Mil.
Gross Profit was 144.759 + 166.823 + 152.339 + 156.548 = $620.5 Mil.
Total Current Assets was $93.5 Mil.
Total Assets was $797.3 Mil.
Property, Plant and Equipment(Net PPE) was $163.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $50.0 Mil.
Selling, General & Admin. Expense(SGA) was $244.6 Mil.
Total Current Liabilities was $92.7 Mil.
Long-Term Debt was $791.3 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)|
|=||(59.551 / 656.902)||/||(61.319 / 660.96)|
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)|
|=||(167.308 / 660.96)||/||(147.868 / 656.902)|
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 - (85.777 + 153.425) / 779.637)||/||(1 - (93.54 + 163.209) / 797.282)|
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))|
|=||(49.964 / (49.964 + 163.209))||/||(46.018 / (46.018 + 153.425))|
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)|
|=||(244.508 / 656.902)||/||(244.564 / 660.96)|
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)|
|=||((736.85 + 105.96) / 779.637)||/||((791.339 + 92.732) / 797.282)|
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|
|=||(4.97 - -20.888||-||86.795)||/||779.637|
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 -2.86 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