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Life Storage Inc (NYSE:LSI)
Beneish M-Score
-2.64 (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 -2.64 suggests that the company is not a manipulator.

LSI' s Beneish M-Score Range Over the Past 10 Years
Min: -4.22   Max: 12.94
Current: -2.64

-4.22
12.94

During the past 13 years, the highest Beneish M-Score of Life Storage Inc was 12.94. The lowest was -4.22. And the median was -2.48.


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 * 0.766+0.528 * 0.899+0.404 * 1.1249+0.892 * 1.2033+0.115 * 1.1452
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9221+4.679 * -0.0309-0.327 * 1.0165
=-2.64

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $6.0 Mil.
Revenue was 127.801 + 107.005 + 99.124 + 95.039 = $429.0 Mil.
Gross Profit was 86.317 + 72.831 + 65.716 + 64.873 = $289.7 Mil.
Total Current Assets was $22.9 Mil.
Total Assets was $3,848.1 Mil.
Property, Plant and Equipment(Net PPE) was $3,689.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $91.2 Mil.
Selling, General & Admin. Expense(SGA) was $41.7 Mil.
Total Current Liabilities was $72.2 Mil.
Long-Term Debt was $1,637.3 Mil.
Net Income was -4.738 + 43.456 + 28.339 + 30.037 = $97.1 Mil.
Non Operating Income was 0.882 + 16.268 + 0.915 + 0.482 = $18.5 Mil.
Cash Flow from Operations was 56.44 + 55.006 + 37.923 + 48.157 = $197.5 Mil.
Accounts Receivable was $6.5 Mil.
Revenue was 95.428 + 90.726 + 85.408 + 84.93 = $356.5 Mil.
Gross Profit was 65.227 + 62.095 + 55.929 + 33.22 = $216.5 Mil.
Total Current Assets was $19.1 Mil.
Total Assets was $2,106.8 Mil.
Property, Plant and Equipment(Net PPE) was $2,021.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $57.4 Mil.
Selling, General & Admin. Expense(SGA) was $37.6 Mil.
Total Current Liabilities was $54.6 Mil.
Long-Term Debt was $866.0 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)
=(5.973 / 428.969) / (6.48 / 356.492)
=0.01392408 / 0.01817713
=0.766

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)
=(216.471 / 356.492) / (289.737 / 428.969)
=0.60722541 / 0.67542643
=0.899

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 - (22.866 + 3688.973) / 3848.116) / (1 - (19.127 + 2021.359) / 2106.812)
=0.03541395 / 0.03148169
=1.1249

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
=428.969 / 356.492
=1.2033

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))
=(57.406 / (57.406 + 2021.359)) / (91.151 / (91.151 + 3688.973))
=0.02761544 / 0.02411323
=1.1452

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)
=(41.687 / 428.969) / (37.57 / 356.492)
=0.09717952 / 0.10538806
=0.9221

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)
=((1637.253 + 72.151) / 3848.116) / ((866.028 + 54.621) / 2106.812)
=0.44421842 / 0.43698678
=1.0165

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
=(97.094 - 18.547 - 197.526) / 3848.116
=-0.0309

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 -2.64 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.11231.04480.83171.02781.13041.00381.27470.94351.0512
GMI 00.87861.14810.99980.85330.9711.15570.98630.9907
AQI 0.19371.89720.93730.97283.12150.57650.8271.28680.9219
SGI 1.15971.01780.97330.96161.09341.16541.16841.19221.1243
DEPI 0.87381.00691.02651.02440.98410.99850.96821.03651.0144
SGAI 0.9321.11441.10891.1751.12791.0670.79820.98030.9763
LVGI 1.57811.08890.75150.86271.33260.9930.87651.06970.9073
TATA -0.0397-0.0329-0.0339-0.0281-0.0375-0.0305-0.0313-0.0349-0.0362
M-score -3.47-2.33-2.70-2.61-1.81-2.67-2.14-2.43-2.49

Life Storage Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.30781.32030.94351.02090.99631.00541.05120.64640.66150.766
GMI 1.17361.16850.98960.98260.97711.02030.91770.91960.92610.899
AQI 0.92420.94931.28681.3331.15811.0270.92190.93640.68491.1249
SGI 1.17971.19711.19221.17871.16051.13821.12431.13181.14521.2033
DEPI 1.07751.06021.03651.02030.98531.01131.01441.10261.08061.1452
SGAI 0.72990.69710.98031.02481.0691.11890.97630.97230.94960.9221
LVGI 1.02391.03421.06970.97620.94640.96910.90730.88470.83091.0165
TATA -0.0314-0.0345-0.0349-0.0361-0.0353-0.0354-0.0362-0.0318-0.0244-0.0309
M-score -2.07-2.05-2.43-2.34-2.45-2.50-2.53-2.85-2.87-2.64
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