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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 -2.82.
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 * 0.954||+||0.528 * 0.9884||+||0.404 * 1.0181||+||0.892 * 0.9699||+||0.115 * 0.95|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9994||+||4.679 * -0.0682||-||0.327 * 0.9797|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|Accounts Receivable was $66.6 Mil.|
Revenue was 168.405 + 159.314 + 157.546 + 155.529 = $640.8 Mil.
Gross Profit was 161.72 + 152.979 + 150.125 + 147.868 = $612.7 Mil.
Total Current Assets was $88.5 Mil.
Total Assets was $743.4 Mil.
Property, Plant and Equipment(Net PPE) was $140.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $45.0 Mil.
Selling, General & Admin. Expense(SGA) was $234.9 Mil.
Total Current Liabilities was $107.1 Mil.
Long-Term Debt was $677.9 Mil.
Net Income was 11.237 + 9.881 + 1.882 + 1.8 = $24.8 Mil.
Non Operating Income was -0.688 + 4.598 + -2.527 + 0.825 = $2.2 Mil.
Cash Flow from Operations was 21.069 + 8.327 + 26.684 + 17.175 = $73.3 Mil.
|Accounts Receivable was $72.0 Mil.
Revenue was 177.21 + 166.274 + 163.125 + 154.093 = $660.7 Mil.
Gross Profit was 168.364 + 157.4 + 153.901 + 144.759 = $624.4 Mil.
Total Current Assets was $103.6 Mil.
Total Assets was $809.3 Mil.
Property, Plant and Equipment(Net PPE) was $156.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $46.6 Mil.
Selling, General & Admin. Expense(SGA) was $242.3 Mil.
Total Current Liabilities was $116.0 Mil.
Long-Term Debt was $756.3 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)|
|=||(66.58 / 640.794)||/||(71.959 / 660.702)|
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)|
|=||(152.979 / 660.702)||/||(161.72 / 640.794)|
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 - (88.542 + 140.845) / 743.404)||/||(1 - (103.61 + 156.089) / 809.327)|
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))|
|=||(46.645 / (46.645 + 156.089))||/||(45.01 / (45.01 + 140.845))|
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)|
|=||(234.905 / 640.794)||/||(242.343 / 660.702)|
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)|
|=||((677.861 + 107.129) / 743.404)||/||((756.3 + 115.993) / 809.327)|
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|
|=||(24.8 - 2.208||-||73.255)||/||743.404|
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 -2.87 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