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Lafarge SA (OTCPK:LFRGY)
Beneish M-Score
-2.45 (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 -2.42 suggests that the company is not a manipulator.

LFRGY' s 10-Year Beneish M-Score Range
Min: -3.41   Max: -2.31
Current: -2.45

-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 -2.63.


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 * 1.1086+0.528 * 1.0362+0.404 * 1.0295+0.892 * 1.0065+0.115 * 0.9464
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9349+4.679 * -0.0196-0.327 * 0.9797
=-2.42

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,706 Mil.
Revenue was 4556.15696888 + 3636.74033149 + 5059.94550409 + 5778.9904502 = $19,032 Mil.
Gross Profit was 1190.79837618 + 587.016574586 + 1147.13896458 + 1519.78171896 = $4,445 Mil.
Total Current Assets was $8,877 Mil.
Total Assets was $47,447 Mil.
Property, Plant and Equipment(Net PPE) was $16,173 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,250 Mil.
Selling, General & Admin. Expense(SGA) was $1,668 Mil.
Total Current Liabilities was $8,348 Mil.
Long-Term Debt was $13,601 Mil.
Net Income was 277.401894452 + -186.464088398 + 290.190735695 + 414.733969986 = $796 Mil.
Non Operating Income was 55.4803788904 + -15.1933701657 + 19.0735694823 + 1.36425648022 = $61 Mil.
Cash Flow from Operations was 40.5953991881 + -95.3038674033 + 920.980926431 + 799.454297408 = $1,666 Mil.
Accounts Receivable was $2,425 Mil.
Revenue was 4658.37696335 + 3487.61408083 + 5065.15957447 + 5697.79507134 = $18,909 Mil.
Gross Profit was 1222.51308901 + 561.929595828 + 1279.25531915 + 1512.32166018 = $4,576 Mil.
Total Current Assets was $9,356 Mil.
Total Assets was $48,391 Mil.
Property, Plant and Equipment(Net PPE) was $16,848 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,228 Mil.
Selling, General & Admin. Expense(SGA) was $1,773 Mil.
Total Current Liabilities was $8,380 Mil.
Long-Term Debt was $14,470 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)
=(2706.35994587 / 19031.8332547) / (2425.39267016 / 18908.94569)
=0.14220175 / 0.12826694
=1.1086

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)
=(587.016574586 / 18908.94569) / (1190.79837618 / 19031.8332547)
=0.2420029 / 0.23354217
=1.0362

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 - (8876.86062246 + 16173.2070365) / 47446.5493911) / (1 - (9356.02094241 + 16848.1675393) / 48391.3612565)
=0.47203605 / 0.4584945
=1.0295

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
=19031.8332547 / 18908.94569
=1.0065

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))
=(1227.58632519 / (1227.58632519 + 16848.1675393)) / (1250.26063956 / (1250.26063956 + 16173.2070365))
=0.06791342 / 0.07175728
=0.9464

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)
=(1668.2694828 / 19031.8332547) / (1772.90956787 / 18908.94569)
=0.08765679 / 0.09376036
=0.9349

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)
=((13600.811908 + 8347.76725304) / 47446.5493911) / ((14469.895288 + 8379.58115183) / 48391.3612565)
=0.4625959 / 0.4721809
=0.9797

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
=(795.862511735 - 60.7248346872 - 1665.72675562) / 47446.5493911
=-0.0196

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 -2.42 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 0.98721.03271.24961.18140.97180.89880.87520.99441.06650.9845
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 -2.17-2.40-2.71-2.48-2.76-2.93-2.62-2.57-2.56-2.41

Lafarge SA Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.87710.86531.03651.06511.10290.94061.1521.20580.8421.1086
GMI 1.06961.05081.01910.97560.98840.99150.99331.0451.03991.0362
AQI 1.0030.98560.98941.00261.02141.20751.05151.02361.1931.0295
SGI 0.99770.9660.9620.9660.9320.92910.93710.93020.9821.0065
DEPI 0.91490.91221.03381.0881.13870.9551.07751.03990.78920.9464
SGAI 0.91610.89630.89650.95870.98261.00811.04020.9820.96710.9349
LVGI 0.93120.930.9640.97910.98530.98381.00211.02010.98670.9797
TATA -0.0232-0.0293-0.0245-0.0234-0.0287-0.0279-0.0257-0.0181-0.0239-0.0196
M-score -2.64-2.72-2.56-2.55-2.55-2.65-2.50-2.40-2.67-2.42
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