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Lee Enterprises Inc. (NYSE:LEE)
Beneish M-Score
-3.49 (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 -3.49 suggests that the company is not a manipulator.

LEE' s 10-Year Beneish M-Score Range
Min: -5.98   Max: -1.2
Current: -3.49

-5.98
-1.2

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 -2.84.


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 * 1.0438+0.528 * 0.9893+0.404 * 0.9291+0.892 * 0.9529+0.115 * 1.0713
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9657+4.679 * -0.2002-0.327 * 1.1617
=-3.49

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $76.9 Mil.
Revenue was 177.385 + 162.463 + 167.019 + 160.603 = $667.5 Mil.
Gross Profit was 166.616 + 154.599 + 155.603 + 149.379 = $626.2 Mil.
Total Current Assets was $105.8 Mil.
Total Assets was $820.2 Mil.
Property, Plant and Equipment(Net PPE) was $165.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $52.6 Mil.
Selling, General & Admin. Expense(SGA) was $253.7 Mil.
Total Current Liabilities was $95.9 Mil.
Long-Term Debt was $812.1 Mil.
Net Income was 11.892 + -88.689 + 1.795 + -5.995 = $-81.0 Mil.
Non Operating Income was -0.01 + 0.334 + 0.052 + -0.103 = $0.3 Mil.
Cash Flow from Operations was 11.993 + 34.015 + 10.764 + 26.155 = $82.9 Mil.
Accounts Receivable was $77.3 Mil.
Revenue was 184.656 + 179.444 + 171.745 + 164.632 = $700.5 Mil.
Gross Profit was 171.679 + 169.58 + 156.975 + 151.92 = $650.2 Mil.
Total Current Assets was $110.6 Mil.
Total Assets was $1,043.5 Mil.
Property, Plant and Equipment(Net PPE) was $181.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $63.2 Mil.
Selling, General & Admin. Expense(SGA) was $275.7 Mil.
Total Current Liabilities was $105.2 Mil.
Long-Term Debt was $889.1 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)
=(76.85 / 667.47) / (77.267 / 700.477)
=0.11513626 / 0.11030626
=1.0438

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)
=(154.599 / 700.477) / (166.616 / 667.47)
=0.92815895 / 0.93816501
=0.9893

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 - (105.763 + 165.935) / 820.236) / (1 - (110.602 + 181.827) / 1043.505)
=0.66875631 / 0.71976272
=0.9291

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
=667.47 / 700.477
=0.9529

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))
=(63.215 / (63.215 + 181.827)) / (52.63 / (52.63 + 165.935))
=0.25797618 / 0.24079793
=1.0713

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)
=(253.697 / 667.47) / (275.685 / 700.477)
=0.38008749 / 0.39356753
=0.9657

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)
=((812.109 + 95.879) / 820.236) / ((889.089 + 105.235) / 1043.505)
=1.10698384 / 0.95286942
=1.1617

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
=(-80.997 - 0.273 - 82.927) / 820.236
=-0.2002

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 -3.49 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.93730.98630.99461.02171.10270.93510.95640.91160.96661.0438
GMI 1.00911.00450.99860.99230.99580.99460.9950.99160.99080.9893
AQI 0.94190.9210.94561.00561.00371.04451.01541.01660.94220.9291
SGI 0.97180.95370.94370.93410.97320.98420.99831.01420.95320.9529
DEPI 0.90660.94270.97010.98080.98880.97150.97150.97611.05371.0713
SGAI 0.98510.98880.97950.97890.99871.0031.00280.99030.96630.9657
LVGI 1.14450.11031.19771.03221.02210.69420.99880.99811.16021.1617
TATA -0.205-0.2088-0.217-0.0675-0.0538-0.0569-0.062-0.0619-0.2115-0.2002
M-score -3.60-3.25-3.64-2.85-2.67-5.98-2.81-2.84-3.61-3.49
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