Switch to:
Li & Fung Ltd. (OTCPK:LFUGF)
Beneish M-Score
0.00 (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.

Li & Fung Ltd. has a M-score of -2.56 suggests that the company is not a manipulator.

LFUGF' s 10-Year Beneish M-Score Range
Min: -2.98   Max: -2.36
Current: 0

-2.98
-2.36

During the past 13 years, the highest Beneish M-Score of Li & Fung Ltd. was -2.36. The lowest was -2.98. And the median was -2.43.


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 Li & Fung Ltd. 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 * 0.9154+0.404 * 1.032+0.892 * 1.0259+0.115 * 0.9639
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9671+4.679 * -0.0151-0.327 * 1.0031
=-2.56

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $0 Mil.
Revenue was $20,745 Mil.
Gross Profit was $3,214 Mil.
Total Current Assets was $4,298 Mil.
Total Assets was $12,465 Mil.
Property, Plant and Equipment(Net PPE) was $440 Mil.
Depreciation, Depletion and Amortization(DDA) was $319 Mil.
Selling, General & Admin. Expense(SGA) was $2,433 Mil.
Total Current Liabilities was $4,082 Mil.
Long-Term Debt was $1,255 Mil.
Net Income was $755 Mil.
Non Operating Income was $1 Mil.
Cash Flow from Operations was $943 Mil.
Accounts Receivable was $0 Mil.
Revenue was $20,222 Mil.
Gross Profit was $2,868 Mil.
Total Current Assets was $4,380 Mil.
Total Assets was $12,018 Mil.
Property, Plant and Equipment(Net PPE) was $419 Mil.
Depreciation, Depletion and Amortization(DDA) was $285 Mil.
Selling, General & Admin. Expense(SGA) was $2,453 Mil.
Total Current Liabilities was $3,874 Mil.
Long-Term Debt was $1,255 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)
=(0 / 20745.41) / (0 / 20221.806)
=0 / 0
=1

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)
=( / 20221.806) / ( / 20745.41)
=0.14184307 / 0.15494787
=0.9154

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 - (4297.74 + 439.599) / 12465.453) / (1 - (4379.969 + 418.624) / 12017.929)
=0.61996255 / 0.60071382
=1.032

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
=20745.41 / 20221.806
=1.0259

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))
=(285.198 / (285.198 + 418.624)) / (318.826 / (318.826 + 439.599))
=0.40521325 / 0.42037908
=0.9639

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)
=(2433.247 / 20745.41) / (2452.622 / 20221.806)
=0.11729086 / 0.121286
=0.9671

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)
=((1254.915 + 4082.124) / 12465.453) / ((1255.461 + 3873.938) / 12017.929)
=0.42814641 / 0.42681222
=1.0031

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
=(755.287 - 0.851 - 942.773) / 12465.453
=-0.0151

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.

Li & Fung Ltd. has a M-score of -2.56 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.

Li & Fung Ltd. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 11111
GMI 0.90690.8490.91291.05110.9154
AQI 1.15451.16081.15350.98751.032
SGI 0.9431.18111.25881.00961.0259
DEPI 00.8860.82771.01240.9639
SGAI 1.03461.13841.15091.10820.9671
LVGI 0.90680.84410.93530.94721.0031
TATA -0.0785-0.0209-0.02230.003-0.0151
M-score -2.98-2.42-2.36-2.44-2.56
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide