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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 -3.45 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 * 1.0464+0.528 * 0.9896+0.404 * 0.9311+0.892 * 0.949+0.115 * 1.0954
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9648+4.679 * -0.1923-0.327 * 1.1547
=-3.45

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $61.3 Mil.
Revenue was 154.093 + 177.385 + 162.463 + 167.019 = $661.0 Mil.
Gross Profit was 144.759 + 166.616 + 154.599 + 155.603 = $621.6 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 $248.6 Mil.
Total Current Liabilities was $92.7 Mil.
Long-Term Debt was $791.3 Mil.
Net Income was 1.486 + 11.892 + -88.689 + 1.795 = $-73.5 Mil.
Non Operating Income was -0.072 + -0.01 + 0.334 + 0.052 = $0.3 Mil.
Cash Flow from Operations was 22.752 + 11.993 + 34.015 + 10.764 = $79.5 Mil.
Accounts Receivable was $61.7 Mil.
Revenue was 160.603 + 184.656 + 179.444 + 171.745 = $696.4 Mil.
Gross Profit was 149.891 + 171.679 + 169.58 + 156.975 = $648.1 Mil.
Total Current Assets was $96.6 Mil.
Total Assets was $1,010.8 Mil.
Property, Plant and Equipment(Net PPE) was $178.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $61.5 Mil.
Selling, General & Admin. Expense(SGA) was $271.5 Mil.
Total Current Liabilities was $103.6 Mil.
Long-Term Debt was $867.1 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)
=(61.319 / 660.96) / (61.745 / 696.448)
=0.09277263 / 0.08865701
=1.0464

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)
=(166.616 / 696.448) / (144.759 / 660.96)
=0.93061506 / 0.94041546
=0.9896

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 - (93.54 + 163.209) / 797.282) / (1 - (96.646 + 178.151) / 1010.822)
=0.67796965 / 0.72814501
=0.9311

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
=660.96 / 696.448
=0.949

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))
=(61.541 / (61.541 + 178.151)) / (49.968 / (49.968 + 163.209))
=0.25675033 / 0.23439677
=1.0954

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)
=(248.559 / 660.96) / (271.468 / 696.448)
=0.37605755 / 0.38978933
=0.9648

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)
=((791.339 + 92.732) / 797.282) / ((867.088 + 103.575) / 1010.822)
=1.10885609 / 0.96027095
=1.1547

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
=(-73.516 - 0.304 - 79.524) / 797.282
=-0.1923

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 -3.45 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 1.02311.85970.69660.87480.91461.0391.02230.93731.10420.9653
GMI 1.01031.00981.03841.01220.70930.98340.9821.00890.99550.9908
AQI 1.01611.0690.99861.00350.91670.96151.00470.94191.00370.9422
SGI 1.05561.19841.37830.99910.91240.81840.88890.97180.9720.9545
DEPI 0.9571.3640.670.95450.94321.0210.99280.90660.98881.0537
SGAI 0.97831.03930.91921.01621.04440.98240.99580.98580.99890.9668
LVGI 0.75842.47240.94870.95581.51971.13250.97671.14451.0221.1602
TATA -0.0369-0.0246-0.0426-0.0316-0.4983-0.1198-0.0357-0.205-0.0511-0.2115
M-score -2.49-2.04-2.61-2.73-5.34-3.23-2.73-3.60-2.66-3.61

Lee Enterprises Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.98630.99461.02171.10270.93510.95640.91160.96661.04381.0464
GMI 1.00450.99860.99230.99580.99460.99430.99080.990.98850.9896
AQI 0.9210.94561.00561.00371.04451.01541.01660.94220.92910.9311
SGI 0.95370.94370.93410.97320.98420.99831.01420.95320.95290.949
DEPI 0.94270.97010.98080.98880.97150.97310.97611.05371.07131.0954
SGAI 0.98880.97950.97890.99871.0031.00280.99030.96630.96570.9648
LVGI 0.11031.19771.03221.02210.69420.99880.99811.16021.16171.1547
TATA -0.2088-0.217-0.0675-0.0538-0.0569-0.062-0.0619-0.2115-0.2002-0.1923
M-score -3.25-3.64-2.85-2.67-5.98-2.81-2.84-3.61-3.49-3.45
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