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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 -2.22. The lowest was -5.25. And the median was -2.77.
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 * 0.9627||+||0.528 * 0.9886||+||0.404 * 0.9933||+||0.892 * 0.9813||+||0.115 * 0.9583|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0007||+||4.679 * -0.0678||-||0.327 * 0.9603|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $58.9 Mil.|
Revenue was 159.314 + 157.546 + 155.529 + 176.154 = $648.5 Mil.
Gross Profit was 152.979 + 150.125 + 147.868 + 167.308 = $618.3 Mil.
Total Current Assets was $98.3 Mil.
Total Assets was $763.5 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 $238.2 Mil.
Total Current Liabilities was $105.3 Mil.
Long-Term Debt was $700.9 Mil.
Net Income was 9.881 + 1.882 + 1.8 + 9.753 = $23.3 Mil.
Non Operating Income was 4.598 + -2.527 + 0.825 + -2.28 = $0.6 Mil.
Cash Flow from Operations was 8.327 + 26.684 + 17.175 + 22.29 = $74.5 Mil.
|Accounts Receivable was $62.3 Mil.
Revenue was 166.274 + 163.125 + 154.093 + 177.385 = $660.9 Mil.
Gross Profit was 157.4 + 153.901 + 144.759 + 166.823 = $622.9 Mil.
Total Current Assets was $96.1 Mil.
Total Assets was $811.3 Mil.
Property, Plant and Equipment(Net PPE) was $157.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $47.2 Mil.
Selling, General & Admin. Expense(SGA) was $242.5 Mil.
Total Current Liabilities was $118.7 Mil.
Long-Term Debt was $773.4 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)|
|=||(58.899 / 648.543)||/||(62.343 / 660.877)|
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)|
|=||(150.125 / 660.877)||/||(152.979 / 648.543)|
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 - (98.323 + 143.769) / 763.484)||/||(1 - (96.135 + 157.371) / 811.275)|
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))|
|=||(47.173 / (47.173 + 157.371))||/||(45.563 / (45.563 + 143.769))|
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)|
|=||(238.177 / 648.543)||/||(242.548 / 660.877)|
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)|
|=||((700.872 + 105.281) / 763.484)||/||((773.35 + 118.708) / 811.275)|
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|
|=||(23.316 - 0.616||-||74.476)||/||763.484|
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 -2.85 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