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Lexmark International Inc (NYSE:LXK)
Beneish M-Score
-2.50 (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.

Lexmark International Inc has a M-score of -2.50 suggests that the company is not a manipulator.

LXK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.41   Max: -1.88
Current: -2.5

-3.41
-1.88

During the past 13 years, the highest Beneish M-Score of Lexmark International Inc was -1.88. The lowest was -3.41. And the median was -2.70.


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 Lexmark International 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 * 1.1199+0.528 * 0.9685+0.404 * 1.9655+0.892 * 0.9513+0.115 * 0.84
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2664+4.679 * -0.0772-0.327 * 1.1049
=-2.50

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $420 Mil.
Revenue was 806.2 + 968.8 + 851.1 + 879.3 = $3,505 Mil.
Gross Profit was 306.4 + 385.2 + 319.6 + 362.1 = $1,373 Mil.
Total Current Assets was $983 Mil.
Total Assets was $3,831 Mil.
Property, Plant and Equipment(Net PPE) was $725 Mil.
Depreciation, Depletion and Amortization(DDA) was $309 Mil.
Selling, General & Admin. Expense(SGA) was $1,074 Mil.
Total Current Liabilities was $1,189 Mil.
Long-Term Debt was $992 Mil.
Net Income was -39.4 + -10.7 + -15.2 + -36.3 = $-102 Mil.
Non Operating Income was -0.4 + -0.2 + -3.4 + 0.6 = $-3 Mil.
Cash Flow from Operations was 79.1 + 103.1 + 21.9 + -6.7 = $197 Mil.
Accounts Receivable was $395 Mil.
Revenue was 852 + 1022.9 + 918.1 + 891.8 = $3,685 Mil.
Gross Profit was 329.9 + 359.7 + 357.3 + 351.2 = $1,398 Mil.
Total Current Assets was $1,718 Mil.
Total Assets was $3,465 Mil.
Property, Plant and Equipment(Net PPE) was $771 Mil.
Depreciation, Depletion and Amortization(DDA) was $259 Mil.
Selling, General & Admin. Expense(SGA) was $891 Mil.
Total Current Liabilities was $1,086 Mil.
Long-Term Debt was $700 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)
=(420.4 / 3505.4) / (394.6 / 3684.8)
=0.11992925 / 0.10708858
=1.1199

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)
=(1398.1 / 3684.8) / (1373.3 / 3505.4)
=0.37942358 / 0.39176699
=0.9685

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 - (982.8 + 725.2) / 3830.8) / (1 - (1717.6 + 770.8) / 3465.4)
=0.55414013 / 0.28192994
=1.9655

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
=3505.4 / 3684.8
=0.9513

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))
=(258.6 / (258.6 + 770.8)) / (309.4 / (309.4 + 725.2))
=0.2512143 / 0.29905277
=0.84

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)
=(1073.9 / 3505.4) / (891.4 / 3684.8)
=0.30635591 / 0.24191272
=1.2664

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)
=((992 + 1188.9) / 3830.8) / ((699.7 + 1085.8) / 3465.4)
=0.56930667 / 0.51523634
=1.1049

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
=(-101.6 - -3.4 - 197.4) / 3830.8
=-0.0772

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.

Lexmark International Inc has a M-score of -2.50 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.

Lexmark International Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.91761.01730.81091.16061.04280.96071.25680.89440.92681.0697
GMI 0.97211.0250.92761.00380.9330.95521.02740.93641.03620.966
AQI 0.61310.98231.75120.85621.60921.03531.45111.07141.25791.8883
SGI 0.97830.97370.91040.85681.08240.99360.910.96581.01170.9571
DEPI 0.83431.05830.94451.01311.05510.89860.81181.04670.94730.8544
SGAI 1.01731.09571.09090.936511.09251.16081.04321.08371.193
LVGI 1.24530.92741.21680.94010.93220.95271.01521.03191.01081.1058
TATA -0.1148-0.0866-0.0718-0.0741-0.0489-0.0194-0.0872-0.0582-0.0922-0.0369
M-score -3.39-2.87-2.90-2.83-2.36-2.63-2.59-2.90-2.87-2.37

Lexmark International Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.89450.87690.76180.79780.92680.9131.14811.14191.06971.1199
GMI 0.93760.92910.91960.94141.03621.04331.03691.04480.9660.9685
AQI 1.07141.04451.10131.30241.25791.23232.28921.84061.88831.9655
SGI 0.96570.99231.00231.01791.01171.00651.00170.97610.95710.9513
DEPI 1.04671.04481.06770.98080.94730.95160.93490.89620.85440.84
SGAI 1.04161.01141.00651.00281.08391.08351.1621.24371.18951.2664
LVGI 1.03191.0191.00941.0311.01081.03481.12151.09431.10581.1049
TATA -0.0545-0.0475-0.0714-0.0649-0.088-0.0948-0.073-0.0605-0.0373-0.0772
M-score -2.88-2.84-3.03-2.88-2.85-2.91-2.22-2.38-2.37-2.50
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