Switch to:
GuruFocus has detected 8 Warning Signs with Life Storage Inc $LSI.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Life Storage Inc (NYSE:LSI)
Beneish M-Score
-2.85 (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.

Life Storage Inc has a M-score of -2.85 suggests that the company is not a manipulator.

LSI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.33   Max: 12.94
Current: -2.85

-3.33
12.94

During the past 13 years, the highest Beneish M-Score of Life Storage Inc was 12.94. The lowest was -3.33. And the median was -2.55.


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 Life Storage 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 * 0.6369+0.528 * 1.0057+0.404 * 0.8497+0.892 * 1.2619+0.115 * 0.9166
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8836+4.679 * -0.0414-0.327 * 1.0812
=-2.85

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $5.5 Mil.
Revenue was 128.679 + 127.801 + 107.005 + 99.124 = $462.6 Mil.
Gross Profit was 86.481 + 86.317 + 72.831 + 65.716 = $311.3 Mil.
Total Current Assets was $30.4 Mil.
Total Assets was $3,858.0 Mil.
Property, Plant and Equipment(Net PPE) was $3,707.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $117.1 Mil.
Selling, General & Admin. Expense(SGA) was $43.1 Mil.
Total Current Liabilities was $84.8 Mil.
Long-Term Debt was $1,653.6 Mil.
Net Income was 18.167 + -4.738 + 43.456 + 28.339 = $85.2 Mil.
Non Operating Income was 1.493 + 0.882 + 16.268 + 0.915 = $19.6 Mil.
Cash Flow from Operations was 76.181 + 56.44 + 55.006 + 37.923 = $225.6 Mil.
Accounts Receivable was $6.8 Mil.
Revenue was 95.039 + 95.428 + 90.726 + 85.408 = $366.6 Mil.
Gross Profit was 64.873 + 65.227 + 62.095 + 55.929 = $248.1 Mil.
Total Current Assets was $14.8 Mil.
Total Assets was $2,118.8 Mil.
Property, Plant and Equipment(Net PPE) was $2,026.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $58.5 Mil.
Selling, General & Admin. Expense(SGA) was $38.7 Mil.
Total Current Liabilities was $55.4 Mil.
Long-Term Debt was $827.6 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)
=(5.469 / 462.609) / (6.805 / 366.601)
=0.01182208 / 0.01856242
=0.6369

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)
=(248.124 / 366.601) / (311.345 / 462.609)
=0.67682303 / 0.67301976
=1.0057

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 - (30.377 + 3707.604) / 3857.984) / (1 - (14.754 + 2026.507) / 2118.822)
=0.03110511 / 0.03660572
=0.8497

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
=462.609 / 366.601
=1.2619

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))
=(58.506 / (58.506 + 2026.507)) / (117.081 / (117.081 + 3707.604))
=0.02806026 / 0.03061193
=0.9166

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)
=(43.104 / 462.609) / (38.659 / 366.601)
=0.09317588 / 0.10545252
=0.8836

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)
=((1653.552 + 84.832) / 3857.984) / ((827.643 + 55.35) / 2118.822)
=0.45059389 / 0.4167377
=1.0812

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
=(85.224 - 19.558 - 225.55) / 3857.984
=-0.0414

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.

Life Storage Inc has a M-score of -2.85 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 local exchange's currency.

Life Storage Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.11231.04480.83171.02781.13041.00381.27470.94351.05120.6369
GMI 00.87861.14810.99980.85330.9711.15570.98630.99071.0056
AQI 0.19371.89720.93730.97283.12150.57650.8271.28680.92210.8497
SGI 1.15971.01780.97330.96161.09341.16541.16841.19221.12431.2619
DEPI 0.87381.00691.02651.02440.98410.99850.96821.03651.01440.9166
SGAI 0.9321.11441.10891.1751.12791.0670.79820.98030.97630.8836
LVGI 1.57811.08890.75150.86271.33260.9930.87651.06970.90731.0812
TATA -0.0397-0.0329-0.0339-0.0281-0.0375-0.0305-0.0313-0.0349-0.0361-0.0414
M-score -3.47-2.33-2.70-2.61-1.81-2.67-2.14-2.43-2.49-2.85

Life Storage Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.32030.94351.02090.99631.00541.05120.64640.66150.7660.6369
GMI 1.16850.98960.98260.97711.02030.91770.91960.92610.8991.0057
AQI 0.94931.28681.3331.15811.0270.92210.93640.68491.12490.8497
SGI 1.19711.19221.17871.16051.13821.12431.13181.14521.20331.2619
DEPI 1.06021.03651.02030.98531.01131.01441.10261.08061.14520.9166
SGAI 0.69710.98031.02481.0691.11890.97630.97230.94960.92210.8836
LVGI 1.03421.06970.97620.94640.96910.90730.88470.83091.01651.0812
TATA -0.0345-0.0349-0.0361-0.0353-0.0354-0.0361-0.0318-0.0244-0.0309-0.0414
M-score -2.05-2.43-2.34-2.45-2.50-2.53-2.85-2.87-2.64-2.85
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)
FEEDBACK