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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 -2.61 suggests that the company is not a manipulator.
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.
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|
|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
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)|
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)|
|=||(1195.65217391 / 18098.8841236)||/||(1243.55670103 / 20122.9161524)|
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 - (8793.81443299 + 15954.8969072) / 47003.8659794)||/||(1 - (9909.21228304 + 16385.8477971) / 48471.2950601)|
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))|
|=||(1171.91880143 / (1171.91880143 + 16385.8477971))||/||(2370.55848826 / (2370.55848826 + 15954.8969072))|
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)|
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)|
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|
|=||(664.919522005 - 104.965784226||-||2403.42341297)||/||47003.8659794|
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.
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