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Legg Mason (Legg Mason) Beneish M-Score : -2.74 (As of May. 05, 2024)


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What is Legg Mason Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.74 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Legg Mason's Beneish M-Score or its related term are showing as below:

LM' s Beneish M-Score Range Over the Past 10 Years
Min: -5.12   Med: -2.47   Max: 0.36
Current: -2.74

During the past 13 years, the highest Beneish M-Score of Legg Mason was 0.36. The lowest was -5.12. And the median was -2.47.


Legg Mason Beneish M-Score Historical Data

The historical data trend for Legg Mason's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Legg Mason Beneish M-Score Chart

Legg Mason Annual Data
Trend Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.81 -2.36 -2.58 -2.69 -2.54

Legg Mason Quarterly Data
Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.47 -2.35 -2.41 -2.54 -2.74

Competitive Comparison of Legg Mason's Beneish M-Score

For the Asset Management subindustry, Legg Mason's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Legg Mason's Beneish M-Score Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Legg Mason's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Legg Mason's Beneish M-Score falls into.



Legg Mason Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Legg Mason 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 * 1.0048+0.528 * 0.956+0.404 * 0.9771+0.892 * 1.0078+0.115 * 0.8938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0418+4.679 * -0.03697-0.327 * 0.9763
=-2.69

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Jun20) TTM:Last Year (Jun19) TTM:
Total Receivables was $473 Mil.
Revenue was 666.186 + 719.587 + 753.914 + 743.264 = $2,883 Mil.
Gross Profit was 221.629 + 315.428 + 274.518 + 260.438 = $1,072 Mil.
Total Current Assets was $1,962 Mil.
Total Assets was $7,917 Mil.
Property, Plant and Equipment(Net PPE) was $407 Mil.
Depreciation, Depletion and Amortization(DDA) was $70 Mil.
Selling, General, & Admin. Expense(SGA) was $349 Mil.
Total Current Liabilities was $866 Mil.
Long-Term Debt & Capital Lease Obligation was $2,242 Mil.
Net Income was 49.422 + 64.159 + 74.775 + 67.083 = $255 Mil.
Non Operating Income was 28.962 + -41.27 + 18.823 + 4.987 = $12 Mil.
Cash Flow from Operations was -211.492 + 183.472 + 335.358 + 229.303 = $537 Mil.
Total Receivables was $467 Mil.
Revenue was 705.36 + 692.605 + 704.322 + 758.427 = $2,861 Mil.
Gross Profit was 221.626 + 237.648 + 278.604 + 279.017 = $1,017 Mil.
Total Current Assets was $1,746 Mil.
Total Assets was $7,846 Mil.
Property, Plant and Equipment(Net PPE) was $473 Mil.
Depreciation, Depletion and Amortization(DDA) was $72 Mil.
Selling, General, & Admin. Expense(SGA) was $333 Mil.
Total Current Liabilities was $867 Mil.
Long-Term Debt & Capital Lease Obligation was $2,287 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(473.329 / 2882.951) / (467.424 / 2860.714)
=0.164182 / 0.163394
=1.0048

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)
=(1016.895 / 2860.714) / (1072.013 / 2882.951)
=0.355469 / 0.371846
=0.956

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1962.192 + 406.641) / 7917.437) / (1 - (1745.864 + 472.644) / 7845.841)
=0.700808 / 0.717238
=0.9771

4. SGI = Sales Growth Index

Ratio of Revenue 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
=2882.951 / 2860.714
=1.0078

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(71.744 / (71.744 + 472.644)) / (70.33 / (70.33 + 406.641))
=0.131788 / 0.147451
=0.8938

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(349.282 / 2882.951) / (332.688 / 2860.714)
=0.121154 / 0.116295
=1.0418

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2242.095 + 865.51) / 7917.437) / ((2287.22 + 866.881) / 7845.841)
=0.392501 / 0.402009
=0.9763

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
=(255.439 - 11.502 - 536.641) / 7917.437
=-0.03697

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Legg Mason has a M-score of -2.69 suggests that the company is unlikely to be a manipulator.


Legg Mason Beneish M-Score Related Terms

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Legg Mason (Legg Mason) Business Description

Traded in Other Exchanges
N/A
Address
100 International Drive, Baltimore, MD, USA, 21202-1099
Legg Mason provides investment management services for institutional and individual investors. The firm had $783.4 billion in managed assets at the end of June, spread among its equity (25% of total AUM), fixed-income (57%), alternatives (9%), and money market (9%) investment platforms. Legg Mason uses a multiaffiliate business model, with its single- largest affiliate, Western Asset Management, accounting for more than 60% of managed assets. Other major affiliates include ClearBridge Investments (more than 15% of AUM), Brandywine (less than 10%), and Clarion Partners (less than 10%). The remaining affiliates--Martin Currie, Royce & Associates, EnTrustPermal, QS Investors, and RARE Infrastructure--each account for 2% or less of Legg Mason's managed assets.

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