LM has been removed from your Stock Email Alerts list.
Please enter Portfolio Name for new portfolio.
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.
During the past 13 years, the highest Beneish M-Score of Legg Mason Inc was -2.57. The lowest was -3.83. And the median was -2.66.
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 Legg Mason Inc 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 * 1.0277||+||0.528 * 1||+||0.404 * 1.0428||+||0.892 * 1.0282||+||0.115 * 1.0621|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9805||+||4.679 * -0.0356||-||0.327 * 1.0123|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $368 Mil.|
Revenue was 702.346 + 718.984 + 703.895 + 693.881 = $2,819 Mil.
Gross Profit was 702.346 + 718.984 + 703.895 + 693.881 = $2,819 Mil.
Total Current Assets was $1,922 Mil.
Total Assets was $7,074 Mil.
Property, Plant and Equipment(Net PPE) was $180 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $2,120 Mil.
Total Current Liabilities was $815 Mil.
Long-Term Debt was $1,058 Mil.
Net Income was 82.959 + 77.036 + 4.897 + 72.188 = $237 Mil.
Non Operating Income was 10.388 + 9.2 + -108.235 + 9.255 = $-79 Mil.
Cash Flow from Operations was 187.071 + 249.426 + 139.445 + -7.824 = $568 Mil.
|Accounts Receivable was $349 Mil.
Revenue was 681.396 + 720.092 + 669.852 + 670.417 = $2,742 Mil.
Gross Profit was 681.396 + 720.092 + 669.852 + 670.417 = $2,742 Mil.
Total Current Assets was $2,129 Mil.
Total Assets was $7,111 Mil.
Property, Plant and Equipment(Net PPE) was $189 Mil.
Depreciation, Depletion and Amortization(DDA) was $63 Mil.
Selling, General & Admin. Expense(SGA) was $2,103 Mil.
Total Current Liabilities was $821 Mil.
Long-Term Debt was $1,039 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)|
|=||(368.399 / 2819.106)||/||(348.633 / 2741.757)|
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)|
|=||(718.984 / 2741.757)||/||(702.346 / 2819.106)|
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 - (1922.035 + 179.606) / 7073.977)||/||(1 - (2128.591 + 189.241) / 7111.349)|
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))|
|=||(62.845 / (62.845 + 189.241))||/||(55.086 / (55.086 + 179.606))|
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)|
|=||(2119.704 / 2819.106)||/||(2102.563 / 2741.757)|
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)|
|=||((1058.089 + 815.046) / 7073.977)||/||((1038.826 + 821.245) / 7111.349)|
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|
|=||(237.08 - -79.392||-||568.118)||/||7073.977|
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.
Legg Mason Inc has a M-score of -2.57 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
Legg Mason Inc Annual Data
Legg Mason Inc Quarterly Data