Switch to:
LKQ Corp (NAS:LKQ)
Beneish M-Score
-2.51 (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.

LKQ Corp has a M-score of -2.51 suggests that the company is not a manipulator.

LKQ' s Beneish M-Score Range Over the Past 10 Years
Min: -2.74   Max: -1.48
Current: -2.51

-2.74
-1.48

During the past 13 years, the highest Beneish M-Score of LKQ Corp was -1.48. The lowest was -2.74. And the median was -2.23.


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 LKQ Corp 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 * 0.9195+0.528 * 1.0116+0.404 * 1.0032+0.892 * 1.1185+0.115 * 0.957
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9917+4.679 * -0.0229-0.327 * 0.8848
=-2.51

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $627 Mil.
Revenue was 1831.732 + 1838.07 + 1773.912 + 1684.131 = $7,128 Mil.
Gross Profit was 712.779 + 723.944 + 699.479 + 664.559 = $2,801 Mil.
Total Current Assets was $2,387 Mil.
Total Assets was $5,704 Mil.
Property, Plant and Equipment(Net PPE) was $653 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $1,963 Mil.
Total Current Liabilities was $798 Mil.
Long-Term Debt was $1,570 Mil.
Net Income was 101.346 + 119.722 + 107.095 + 80.469 = $409 Mil.
Non Operating Income was 2.928 + -0.097 + -1.919 + -1.17 = $-0 Mil.
Cash Flow from Operations was 208.624 + 102.554 + 180.145 + 48.255 = $540 Mil.
Accounts Receivable was $609 Mil.
Revenue was 1721.024 + 1709.132 + 1625.777 + 1316.689 = $6,373 Mil.
Gross Profit was 664.411 + 671.059 + 651.884 + 545.673 = $2,533 Mil.
Total Current Assets was $2,346 Mil.
Total Assets was $5,535 Mil.
Property, Plant and Equipment(Net PPE) was $612 Mil.
Depreciation, Depletion and Amortization(DDA) was $115 Mil.
Selling, General & Admin. Expense(SGA) was $1,770 Mil.
Total Current Liabilities was $771 Mil.
Long-Term Debt was $1,825 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)
=(626.78 / 7127.845) / (609.434 / 6372.622)
=0.08793401 / 0.09563316
=0.9195

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)
=(723.944 / 6372.622) / (712.779 / 7127.845)
=0.39748584 / 0.39293237
=1.0116

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 - (2387.143 + 652.78) / 5704.032) / (1 - (2345.538 + 612.292) / 5534.578)
=0.46705716 / 0.46557262
=1.0032

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
=7127.845 / 6372.622
=1.1185

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))
=(115.242 / (115.242 + 612.292)) / (129.478 / (129.478 + 652.78))
=0.15840084 / 0.16551828
=0.957

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)
=(1963.135 / 7127.845) / (1769.737 / 6372.622)
=0.27541775 / 0.27770939
=0.9917

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)
=((1570.056 + 797.698) / 5704.032) / ((1825.133 + 771.388) / 5534.578)
=0.41510181 / 0.46914525
=0.8848

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
=(408.632 - -0.258 - 539.578) / 5704.032
=-0.0229

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.

LKQ Corp has a M-score of -2.51 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.

LKQ Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.08290.86471.7860.69530.96061.03931.11380.87771.19650.9861
GMI 0.98861.0391.00921.01510.97591.02331.041.0181.02011.0419
AQI 1.13731.03391.21330.97270.95960.96741.03280.9750.97030.9801
SGI 1.28871.44211.42751.69371.0731.2061.32391.26091.22791.3314
DEPI 1.09260.93321.1330.661.00071.04420.97590.91630.91010.8225
SGAI 0.97640.94970.95370.98791.0050.95140.97090.99390.97120.9642
LVGI 0.77191.27631.75090.88030.90.89231.23050.99591.04281.0652
TATA -0.0166-0.01680.0059-0.0183-0.02040.00430.00080.0152-0.02460.0016
M-score -2.09-2.34-1.48-2.23-2.54-2.19-2.12-2.30-2.23-2.21

LKQ Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.10831.20621.19651.261.15091.04910.98610.8910.88450.9195
GMI 1.02981.01951.02011.0241.02681.03211.04191.03391.02261.0116
AQI 0.96030.98670.97030.98460.98930.94280.98010.95880.96681.0032
SGI 1.20481.20511.22791.28111.31271.32381.33141.25421.17941.1185
DEPI 0.9650.98990.91010.93320.88910.82950.82250.80820.88150.957
SGAI 0.9860.97840.97120.96560.9610.96070.96420.96860.97990.9917
LVGI 1.08551.09071.04281.18311.07861.08061.06520.93310.88260.8848
TATA -0.0026-0.0144-0.0246-0.0161-0.002-0.00560.0016-0.0124-0.0176-0.0229
M-score -2.24-2.20-2.23-2.12-2.09-2.22-2.21-2.41-2.48-2.51
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)

GuruFocus Premium Plus Membership

FEEDBACK