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LSI Corp (NAS:LSI)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

LSI' s 10-Year Beneish M-Score Range
Min: -5.12   Max: -1.99
Current: -2.94

-5.12
-1.99

During the past 13 years, the highest Beneish M-Score of LSI Corp was -1.99. The lowest was -5.12. And the median was -2.88.


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 * 1.0843+0.528 * 0.9611+0.404 * 0.8714+0.892 * 0.9458+0.115 * 1.0693
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0231+4.679 * -0.0939-0.327 * 0.9322
=-2.94

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $271 Mil.
Revenue was 605.067 + 606.943 + 589.583 + 568.636 = $2,370 Mil.
Gross Profit was 310.834 + 312.68 + 299.259 + 289.504 = $1,212 Mil.
Total Current Assets was $1,309 Mil.
Total Assets was $2,362 Mil.
Property, Plant and Equipment(Net PPE) was $302 Mil.
Depreciation, Depletion and Amortization(DDA) was $181 Mil.
Selling, General & Admin. Expense(SGA) was $343 Mil.
Total Current Liabilities was $483 Mil.
Long-Term Debt was $0 Mil.
Net Income was 45.043 + 36.559 + 24.62 + 18.432 = $125 Mil.
Non Operating Income was 0 + 0 + 1.148 + 7.58 = $9 Mil.
Cash Flow from Operations was 134.216 + 62.929 + 77.82 + 62.83 = $338 Mil.
Accounts Receivable was $264 Mil.
Revenue was 600.128 + 623.962 + 659.573 + 622.424 = $2,506 Mil.
Gross Profit was 300.414 + 312.651 + 331.888 + 286.912 = $1,232 Mil.
Total Current Assets was $1,227 Mil.
Total Assets was $2,356 Mil.
Property, Plant and Equipment(Net PPE) was $270 Mil.
Depreciation, Depletion and Amortization(DDA) was $180 Mil.
Selling, General & Admin. Expense(SGA) was $355 Mil.
Total Current Liabilities was $517 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)
=(270.849 / 2370.229) / (264.112 / 2506.087)
=0.11427124 / 0.1053882
=1.0843

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)
=(312.68 / 2506.087) / (310.834 / 2370.229)
=0.49154918 / 0.51145986
=0.9611

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 - (1308.581 + 302.288) / 2361.705) / (1 - (1226.792 + 269.747) / 2356.165)
=0.31792116 / 0.36484117
=0.8714

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
=2370.229 / 2506.087
=0.9458

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))
=(180.484 / (180.484 + 269.747)) / (181.278 / (181.278 + 302.288))
=0.40086978 / 0.37487747
=1.0693

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)
=(343.426 / 2370.229) / (354.923 / 2506.087)
=0.14489149 / 0.14162437
=1.0231

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 + 482.981) / 2361.705) / ((0 + 516.894) / 2356.165)
=0.20450522 / 0.21937937
=0.9322

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
=(124.654 - 8.728 - 337.795) / 2361.705
=-0.0939

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 -2.94 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 1.17191.05271.04410.88740.72751.34521.14370.69050.87371.0843
GMI 0.92450.99761.00521.24290.86941.05070.80691.00030.9580.9611
AQI 0.91080.92561.02831.1330.87161.00170.98660.72831.29510.8714
SGI 1.00421.12891.03281.31351.02820.82890.84251.09321.22610.9458
DEPI 1.00680.61371.24130.89190.94691.05141.01121.0641.27631.0693
SGAI 1.03560.85831.04891.13621.03750.96661.01620.96820.97981.0231
LVGI 1.12450.95340.78661.09541.0190.83890.69421.03311.06250.9322
TATA -0.1918-0.0941-0.0366-0.6301-0.2662-0.0849-0.13490.038-0.0755-0.0902
M-score -3.34-2.79-2.48-5.14-4.09-2.62-3.13-2.61-2.64-2.92

LSI Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.80940.69050.90041.02280.84660.87370.66070.80481.17141.0843
GMI 0.95311.00031.0180.99980.99030.9580.92860.94350.94650.9611
AQI 0.70660.72831.27071.2831.30141.29510.92920.90430.89570.8714
SGI 0.97781.09321.17261.23961.21971.22611.11821.01290.97370.9458
DEPI 1.03421.0641.33481.32441.30441.27631.10061.10271.08291.0693
SGAI 1.02230.96820.97270.96420.99070.97981.00061.04361.02191.0231
LVGI 1.0131.03310.96621.04861.01321.06250.99170.97960.98720.9322
TATA 0.00830.03610.0808-0.0552-0.0799-0.0845-0.1173-0.1122-0.091-0.0939
M-score -2.78-2.62-1.87-2.36-2.65-2.68-3.29-3.23-2.83-2.94
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