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Lafarge SA (OTCPK:LFRGY)
Beneish M-Score
-2.58 (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.

Lafarge SA has a M-score of -2.61 suggests that the company is not a manipulator.

LFRGY' s 10-Year Beneish M-Score Range
Min: -3.41   Max: -2.31
Current: -2.58

-3.41
-2.31

During the past 13 years, the highest Beneish M-Score of Lafarge SA was -2.31. The lowest was -3.41. And the median was -2.64.


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 Lafarge SA 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 * 0.9032+0.528 * 1.095+0.404 * 1.0349+0.892 * 1.1118+0.115 * 0.516
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9015+4.679 * -0.0392-0.327 * 0.9551
=-2.61

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,657 Mil.
Revenue was 4685.56701031 + 4574.72826087 + 3641.77040111 + 7220.85048011 = $20,123 Mil.
Gross Profit was 1243.55670103 + 1195.65217391 + 587.828492393 + 1463.64883402 = $4,491 Mil.
Total Current Assets was $8,794 Mil.
Total Assets was $47,004 Mil.
Property, Plant and Equipment(Net PPE) was $15,955 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,371 Mil.
Selling, General & Admin. Expense(SGA) was $1,731 Mil.
Total Current Liabilities was $7,732 Mil.
Long-Term Debt was $13,329 Mil.
Net Income was 280.927835052 + 278.532608696 + -186.721991701 + 292.181069959 = $665 Mil.
Non Operating Income was 42.5257731959 + 55.7065217391 + -15.214384509 + 21.9478737997 = $105 Mil.
Cash Flow from Operations was 1469.07216495 + 40.7608695652 + -95.4356846473 + 989.0260631 = $2,403 Mil.
Accounts Receivable was $2,646 Mil.
Revenue was 4939.91989319 + 4695.25065963 + 3465.02590674 + 4998.68766404 = $18,099 Mil.
Gross Profit was 1369.82643525 + 1232.18997361 + 558.29015544 + 1262.4671916 = $4,423 Mil.
Total Current Assets was $9,909 Mil.
Total Assets was $48,471 Mil.
Property, Plant and Equipment(Net PPE) was $16,386 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,172 Mil.
Selling, General & Admin. Expense(SGA) was $1,727 Mil.
Total Current Liabilities was $8,360 Mil.
Long-Term Debt was $14,379 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)
=(2657.21649485 / 20122.9161524) / (2646.19492657 / 18098.8841236)
=0.13204928 / 0.14620763
=0.9032

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)
=(1195.65217391 / 18098.8841236) / (1243.55670103 / 20122.9161524)
=0.24436721 / 0.22316279
=1.095

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 - (8793.81443299 + 15954.8969072) / 47003.8659794) / (1 - (9909.21228304 + 16385.8477971) / 48471.2950601)
=0.47347498 / 0.45751274
=1.0349

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
=20122.9161524 / 18098.8841236
=1.1118

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))
=(1171.91880143 / (1171.91880143 + 16385.8477971)) / (2370.55848826 / (2370.55848826 + 15954.8969072))
=0.06674646 / 0.12935878
=0.516

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)
=(1731.45958994 / 20122.9161524) / (1727.38092023 / 18098.8841236)
=0.08604417 / 0.09544129
=0.9015

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)
=((13328.6082474 + 7731.95876289) / 47003.8659794) / ((14379.1722296 + 8360.48064085) / 48471.2950601)
=0.44806032 / 0.46913648
=0.9551

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
=(664.919522005 - 104.965784226 - 2403.42341297) / 47003.8659794
=-0.0392

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.

Lafarge SA has a M-score of -2.61 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.

Lafarge SA Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.35881.20710.75080.90290.85370.87081.12670.96560.96471.1393
GMI 1.22281.01531.00740.9591.00111.05970.99661.10270.97481.0787
AQI 0.89740.96071.03741.08761.16361.03820.96870.96861.00261.0236
SGI 1.03640.98821.30041.14791.00320.90020.84741.02491.03211.0044
DEPI 1.29681.05690.8481.05011.22570.94851.09560.91860.99190.9697
SGAI 0.90940.98240.90510.91620.97531.15610.9580.94310.96050.9797
LVGI 1.00240.97791.14080.93611.1610.88011.01620.94320.97911.0201
TATA -0.0287-0.0319-0.0426-0.0271-0.0345-0.0621-0.0311-0.025-0.0238-0.0182
M-score -2.13-2.44-2.67-2.51-2.73-2.93-2.65-2.55-2.59-2.39

Lafarge SA Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.84681.01261.03041.10120.94340.98581.15080.79161.02660.9032
GMI 1.04971.02090.97720.98770.99150.98111.07681.07231.06831.095
AQI 0.98560.98941.00261.02141.20751.2351.02361.1931.02951.0349
SGI 0.99950.9770.96630.92370.91430.88490.99441.05271.08271.1118
DEPI 0.89441.00951.05331.13790.95770.93510.98010.73310.8670.516
SGAI 0.89590.89790.96030.98231.00821.04660.97640.96310.93230.9015
LVGI 0.930.9640.97910.98530.98160.9691.02010.98670.98040.9551
TATA -0.0292-0.025-0.0234-0.0287-0.0274-0.0262-0.0182-0.0241-0.0197-0.0392
M-score -2.71-2.57-2.58-2.56-2.66-2.64-2.39-2.64-2.42-2.61
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