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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 -2.71 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 -2.61.


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 * 0.903+0.528 * 1.0059+0.404 * 1.0399+0.892 * 0.9213+0.115 * 0.9138
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9462+4.679 * -0.0256-0.327 * 0.8987
=-2.71

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,747 Mil.
Revenue was 3007.57575758 + 3954.37731196 + 4685.56701031 + 4574.72826087 = $16,222 Mil.
Gross Profit was 525.974025974 + 906.288532676 + 1243.55670103 + 1195.65217391 = $3,871 Mil.
Total Current Assets was $6,601 Mil.
Total Assets was $39,667 Mil.
Property, Plant and Equipment(Net PPE) was $13,700 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,044 Mil.
Selling, General & Admin. Expense(SGA) was $1,396 Mil.
Total Current Liabilities was $6,673 Mil.
Long-Term Debt was $9,885 Mil.
Net Income was -103.896103896 + -178.79161529 + 280.927835052 + 278.532608696 = $277 Mil.
Non Operating Income was -8.65800865801 + 7.39827373613 + 42.5257731959 + 55.7065217391 = $97 Mil.
Cash Flow from Operations was -88.7445887446 + 652.281134402 + 590.206185567 + 40.7608695652 = $1,195 Mil.
Accounts Receivable was $2,100 Mil.
Revenue was 3641.77040111 + 4330.58984911 + 4939.91989319 + 4695.25065963 = $17,608 Mil.
Gross Profit was 587.828492393 + 1037.03703704 + 1369.82643525 + 1232.18997361 = $4,227 Mil.
Total Current Assets was $9,196 Mil.
Total Assets was $48,267 Mil.
Property, Plant and Equipment(Net PPE) was $16,409 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,136 Mil.
Selling, General & Admin. Expense(SGA) was $1,602 Mil.
Total Current Liabilities was $7,817 Mil.
Long-Term Debt was $14,602 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)
=(1746.75324675 / 16222.2483407) / (2099.58506224 / 17607.530803)
=0.1076764 / 0.11924358
=0.903

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)
=(906.288532676 / 17607.530803) / (525.974025974 / 16222.2483407)
=0.24006103 / 0.23865196
=1.0059

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 - (6600.64935065 + 13700.2164502) / 39666.6666667) / (1 - (9196.40387275 + 16409.4052559) / 48266.9432918)
=0.48821347 / 0.46949595
=1.0399

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
=16222.2483407 / 17607.530803
=0.9213

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))
=(1135.58304944 / (1135.58304944 + 16409.4052559)) / (1044.37559577 / (1044.37559577 + 13700.2164502))
=0.06472407 / 0.07083109
=0.9138

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)
=(1396.15975873 / 16222.2483407) / (1601.53623551 / 17607.530803)
=0.0860645 / 0.09095746
=0.9462

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)
=((9885.28138528 + 6673.16017316) / 39666.6666667) / ((14601.659751 + 7817.42738589) / 48266.9432918)
=0.4174397 / 0.46448119
=0.8987

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
=(276.772724561 - 96.9725600131 - 1194.50360079) / 39666.6666667
=-0.0256

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 -2.71 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.03041.10120.94340.98581.07520.92161.19631.05460.96020.903
GMI 0.97720.98770.99150.98111.01761.0141.01011.03621.0321.0059
AQI 1.00261.02141.20751.2351.20931.1931.02951.03491.04211.0399
SGI 0.96630.92370.91430.88490.8530.90430.92920.95210.96710.9213
DEPI 1.05331.13790.95770.93510.96520.8721.03221.01710.93440.9138
SGAI 0.96030.98231.00821.04660.99190.97650.94160.90850.95040.9462
LVGI 0.97910.98530.98160.9690.98850.98530.98040.95510.91520.8987
TATA -0.0234-0.0287-0.0274-0.0262-0.0143-0.0193-0.0148-0.0156-0.0253-0.0256
M-score -2.58-2.56-2.66-2.64-2.51-2.65-2.39-2.48-2.60-2.71
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