Switch to:
LSI Corp (NAS:LSI)
Beneish M-Score
-2.77 (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.

LSI Corp has a M-score of -2.77 suggests that the company is not a manipulator.

LSI' s 10-Year Beneish M-Score Range
Min: -4.27   Max: -1.88
Current: -2.77

-4.27
-1.88

During the past 13 years, the highest Beneish M-Score of LSI Corp was -1.88. The lowest was -4.27. And the median was -2.94.


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 LSI 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 * 1.1644+0.528 * 0.9831+0.404 * 0.8094+0.892 * 0.9667+0.115 * 1.0324
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9637+4.679 * -0.0754-0.327 * 0.9602
=-2.77

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $251 Mil.
Revenue was 569.066 + 605.067 + 606.943 + 589.583 = $2,371 Mil.
Gross Profit was 291.125 + 310.834 + 312.68 + 299.259 = $1,214 Mil.
Total Current Assets was $1,381 Mil.
Total Assets was $2,399 Mil.
Property, Plant and Equipment(Net PPE) was $299 Mil.
Depreciation, Depletion and Amortization(DDA) was $183 Mil.
Selling, General & Admin. Expense(SGA) was $330 Mil.
Total Current Liabilities was $454 Mil.
Long-Term Debt was $0 Mil.
Net Income was 33.233 + 45.043 + 36.559 + 24.62 = $139 Mil.
Non Operating Income was 1.2 + 0 + 0 + 1.148 = $2 Mil.
Cash Flow from Operations was 43.013 + 134.216 + 62.929 + 77.82 = $318 Mil.
Accounts Receivable was $223 Mil.
Revenue was 568.636 + 600.128 + 623.962 + 659.573 = $2,452 Mil.
Gross Profit was 289.504 + 300.414 + 312.651 + 331.888 = $1,234 Mil.
Total Current Assets was $1,133 Mil.
Total Assets was $2,241 Mil.
Property, Plant and Equipment(Net PPE) was $278 Mil.
Depreciation, Depletion and Amortization(DDA) was $179 Mil.
Selling, General & Admin. Expense(SGA) was $354 Mil.
Total Current Liabilities was $442 Mil.
Long-Term Debt was $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)
=(251.223 / 2370.659) / (223.185 / 2452.299)
=0.1059718 / 0.09101052
=1.1644

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)
=(310.834 / 2452.299) / (291.125 / 2370.659)
=0.50338764 / 0.51205087
=0.9831

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 - (1381.48 + 298.582) / 2399.477) / (1 - (1132.832 + 277.995) / 2240.895)
=0.29982159 / 0.37041807
=0.8094

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
=2370.659 / 2452.299
=0.9667

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))
=(179.401 / (179.401 + 277.995)) / (182.922 / (182.922 + 298.582))
=0.39222249 / 0.37989716
=1.0324

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)
=(330.099 / 2370.659) / (354.318 / 2452.299)
=0.13924356 / 0.14448401
=0.9637

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)
=((0 + 453.957) / 2399.477) / ((0 + 441.528) / 2240.895)
=0.18918998 / 0.19703199
=0.9602

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
=(139.455 - 2.348 - 317.978) / 2399.477
=-0.0754

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.

LSI Corp has a M-score of -2.77 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.

LSI Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.17191.05271.04410.88740.72751.34520.8320.94910.87371.0843
GMI 0.92450.99761.00521.24290.86941.05070.88090.91630.9580.9611
AQI 0.91080.92561.02831.1330.87161.00170.98660.72831.29510.8714
SGI 1.00421.12891.03281.31351.02820.82891.15810.79531.22610.9458
DEPI 1.00680.61371.24130.89190.94691.05141.01121.0641.27631.0693
SGAI 1.03560.85831.04891.13621.03750.96660.90851.0830.97981.0231
LVGI 1.12450.95340.78661.09541.0190.83890.69421.03311.06250.9322
TATA -0.1918-0.0941-0.0366-0.1729-0.2662-0.0849-0.1350.038-0.0755-0.0902
M-score -3.34-2.79-2.48-3.00-4.09-2.62-3.08-2.70-2.64-2.92

LSI Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.94911.15831.22220.9290.87370.66070.80481.17141.08431.1644
GMI 0.91630.9440.94870.9620.9580.92860.94350.94650.96110.9831
AQI 0.72831.27071.2831.30141.29510.92920.90430.89570.87140.8094
SGI 0.79530.91151.03731.11161.22611.11821.01290.97370.94580.9667
DEPI 1.0641.33481.32441.30441.27631.10061.10271.08291.06931.0324
SGAI 1.0831.06721.03291.02950.97981.00061.04361.02191.02310.9637
LVGI 1.03310.96621.04861.01321.06250.99170.97960.98720.93220.9602
TATA 0.03950.084-0.0506-0.0719-0.0845-0.1173-0.1122-0.091-0.094-0.0754
M-score -2.70-1.90-2.38-2.65-2.68-3.29-3.23-2.83-2.94-2.77
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)
Free 7-day Trial
FEEDBACK
Email Hide