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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.
Lafarge SA has a M-score of -2.53 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Lafarge SA was -2.18. The lowest was -3.55. And the median was -2.66.
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||+||0.528 * 1.0351||+||0.404 * 1.0295||+||0.892 * 1.0065||+||0.115 * 0.9464|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9497||+||4.679 * -0.0196||-||0.327 * 0.9797|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $0 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 $0 Mil.
Revenue was 4658.37696335 + 3487.61408083 + 5065.15957447 + 5697.79507134 = $18,909 Mil.
Gross Profit was 1222.51308901 + 561.929595828 + 1279.25531915 + 1507.13359274 = $4,571 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 $1,745 Mil.
Total Current Liabilities was $8,380 Mil.
Long-Term Debt was $14,470 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)|
|=||(0 / 19031.8332547)||/||(0 / 18908.94569)|
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)|
|=||(587.016574586 / 18908.94569)||/||(1190.79837618 / 19031.8332547)|
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 - (8876.86062246 + 16173.2070365) / 47446.5493911)||/||(1 - (9356.02094241 + 16848.1675393) / 48391.3612565)|
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))|
|=||(1227.58632519 / (1227.58632519 + 16848.1675393))||/||(1250.26063956 / (1250.26063956 + 16173.2070365))|
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)||/||(1745.27896931 / 18908.94569)|
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)|
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|
|=||(795.862511735 - 60.7248346872||-||1665.72675562)||/||47446.5493911|
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 -2.53 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
Lafarge SA Annual Data
Lafarge SA Quarterly Data