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Lee Enterprises Inc (NYSE:LEE)
Beneish M-Score
-3.50 (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 -3.50 suggests that the company is not a manipulator.

LEE' s 10-Year Beneish M-Score Range
Min: -6.36   Max: -1.2
Current: -3.5

-6.36
-1.2

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 -2.85.


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 * 0.9865+0.528 * 0.9983+0.404 * 0.9388+0.892 * 0.9771+0.115 * 1.1259
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9744+4.679 * -0.1998-0.327 * 1.1444
=-3.50

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

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 + 185.459 + 159.359 = $672.4 Mil.
Gross Profit was 156.548 + 149.891 + 172.409 + 152.172 = $631.0 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 $60.0 Mil.
Selling, General & Admin. Expense(SGA) was $257.0 Mil.
Total Current Liabilities was $100.7 Mil.
Long-Term Debt was $847.4 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)
=(61.577 / 657.066) / (63.881 / 672.44)
=0.09371509 / 0.09499881
=0.9865

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)
=(144.759 / 672.44) / (153.901 / 657.066)
=0.93840343 / 0.93995885
=0.9983

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 - (96.914 + 160.874) / 828.17) / (1 - (88.796 + 174.682) / 989.03)
=0.68872574 / 0.73359959
=0.9388

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
=657.066 / 672.44
=0.9771

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))
=(60.031 / (60.031 + 174.682)) / (47.289 / (47.289 + 160.874))
=0.25576342 / 0.22717294
=1.1259

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) / (257.009 / 672.44)
=0.3724253 / 0.38220362
=0.9744

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)
=1.09699579 / 0.95857153
=1.1444

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
=(-85.057 - -23.181 - 103.598) / 828.17
=-0.1998

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.


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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 1.02311.85970.69660.87480.91461.0390.98010.96331.11890.9668
GMI 1.01031.00981.03841.01220.70930.98340.98261.00910.99470.9906
AQI 1.01611.0690.99861.00350.91670.96151.00470.94411.01170.9326
SGI 1.05561.19841.37830.99910.91240.81840.92710.96860.93970.9497
DEPI 0.9571.3640.670.95450.94321.0210.97980.94210.95911.0593
SGAI 0.97831.03930.91921.01621.04440.98241.00440.97920.99880.9649
LVGI 0.75842.47240.94870.95581.51971.13250.97671.14451.0221.1602
TATA -0.0369-0.0246-0.0426-0.0316-0.4983-0.1186-0.0353-0.205-0.1291-0.2115
M-score -2.49-2.04-2.61-2.73-5.34-3.22-2.73-3.57-3.04-3.62

Lee Enterprises Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.97640.99191.11890.98861.0341.00850.96561.03771.02880.9865
GMI 0.99960.99460.99440.99350.9920.98480.99240.99090.99260.9983
AQI 0.94561.00561.01171.04451.01541.01660.93260.92910.93110.9388
SGI 0.96120.96220.93970.9310.92340.91670.95080.95850.96530.9771
DEPI 0.96440.97070.95910.97540.98891.00131.05661.0811.09861.1259
SGAI 0.98080.98340.99940.99620.98730.97120.95950.96140.96450.9744
LVGI 1.19771.03221.02210.69420.99880.99811.16021.16171.15471.1444
TATA -0.2167-0.0672-0.1315-0.1393-0.147-0.1488-0.2154-0.2002-0.1923-0.1998
M-score -3.64-2.85-3.05-6.36-3.20-3.24-3.63-3.49-3.45-3.50
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