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Lafarge SA (OTCPK:LFRGY)
Beneish M-Score
-2.50 (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.

Lafarge SA has a M-score of -2.60 suggests that the company is not a manipulator.

LFRGY' s 10-Year Beneish M-Score Range
Min: -3.25   Max: -2.31
Current: -2.5

-3.25
-2.31

During the past 13 years, the highest Beneish M-Score of Lafarge SA was -2.31. The lowest was -3.25. And the median was -2.58.


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 * 0.9602+0.528 * 1.032+0.404 * 1.0421+0.892 * 0.9671+0.115 * 0.9344
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9504+4.679 * -0.0253-0.327 * 0.9152
=-2.60

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,969 Mil.
Revenue was 3954.37731196 + 4685.56701031 + 4574.72826087 + 3641.77040111 = $16,856 Mil.
Gross Profit was 906.288532676 + 1243.55670103 + 1195.65217391 + 587.828492393 = $3,933 Mil.
Total Current Assets was $7,239 Mil.
Total Assets was $42,915 Mil.
Property, Plant and Equipment(Net PPE) was $14,861 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,103 Mil.
Selling, General & Admin. Expense(SGA) was $1,478 Mil.
Total Current Liabilities was $6,678 Mil.
Long-Term Debt was $11,547 Mil.
Net Income was -178.79161529 + 280.927835052 + 278.532608696 + -186.721991701 = $194 Mil.
Non Operating Income was 7.39827373613 + 42.5257731959 + 55.7065217391 + -15.214384509 = $90 Mil.
Cash Flow from Operations was 652.281134402 + 590.206185567 + 40.7608695652 + -95.4356846473 = $1,188 Mil.
Accounts Receivable was $2,121 Mil.
Revenue was 4330.58984911 + 4939.91989319 + 4695.25065963 + 3465.02590674 = $17,431 Mil.
Gross Profit was 1037.03703704 + 1369.82643525 + 1232.18997361 + 558.29015544 = $4,197 Mil.
Total Current Assets was $9,309 Mil.
Total Assets was $48,331 Mil.
Property, Plant and Equipment(Net PPE) was $16,528 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,140 Mil.
Selling, General & Admin. Expense(SGA) was $1,608 Mil.
Total Current Liabilities was $7,945 Mil.
Long-Term Debt was $14,481 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)
=(1969.17385943 / 16856.4429842) / (2120.7133059 / 17430.7863087)
=0.11682025 / 0.12166481
=0.9602

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)
=(1243.55670103 / 17430.7863087) / (906.288532676 / 16856.4429842)
=0.24080059 / 0.23334258
=1.032

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 - (7239.2108508 + 14860.6658446) / 42914.919852) / (1 - (9308.64197531 + 16528.1207133) / 48330.5898491)
=0.48503046 / 0.46541595
=1.0421

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
=16856.4429842 / 17430.7863087
=0.9671

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))
=(1140.30932668 / (1140.30932668 + 16528.1207133)) / (1102.56567678 / (1102.56567678 + 14860.6658446))
=0.06453937 / 0.06906908
=0.9344

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)
=(1477.9393208 / 16856.4429842) / (1608.13116596 / 17430.7863087)
=0.08767801 / 0.0922581
=0.9504

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)
=((11547.4722565 + 6678.17509248) / 42914.919852) / ((14481.4814815 + 7945.1303155) / 48330.5898491)
=0.42469256 / 0.4640252
=0.9152

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
=(193.946836756 - 90.4161841621 - 1187.81250489) / 42914.919852
=-0.0253

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 -2.60 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.20710.75080.90290.85370.87081.12670.96560.96471.06011.0529
GMI 1.01531.00740.9591.00111.05970.99661.10270.97481.0211.0274
AQI 0.96071.03741.08761.16361.03820.96870.96861.00261.20931.0421
SGI 0.98821.30041.14791.00320.90020.84741.02491.03210.86520.8819
DEPI 1.05690.8481.05011.22570.94851.09560.91860.99190.95051.0191
SGAI 0.98240.90510.91620.97531.15610.9580.94310.96050.99510.9469
LVGI 0.97791.14080.93611.1610.88011.01620.94320.97910.98850.9152
TATA -0.0319-0.0426-0.0271-0.0345-0.0621-0.0311-0.025-0.0238-0.0143-0.0251
M-score -2.44-2.67-2.51-2.73-2.93-2.65-2.55-2.59-2.52-2.58

Lafarge SA Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.01261.03041.10120.94340.98581.07520.92161.19631.05460.9602
GMI 1.02090.97720.98770.99150.98111.01761.0141.01011.03621.032
AQI 0.98941.00261.02141.20751.2351.20931.1931.02951.03491.0421
SGI 0.9770.96630.92370.91430.88490.8530.90430.92920.95210.9671
DEPI 1.00951.05331.13790.95770.93510.96520.8721.03221.01710.9344
SGAI 0.89790.96030.98231.00821.04660.99190.97650.94160.90850.9504
LVGI 0.9640.97910.98530.98160.9690.98850.98670.98040.95510.9152
TATA -0.025-0.0234-0.0287-0.0274-0.0262-0.0143-0.0193-0.0148-0.0156-0.0253
M-score -2.57-2.58-2.56-2.66-2.64-2.51-2.65-2.39-2.48-2.60
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