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Lexmark International Inc (NYSE:LXK)
Beneish M-Score
-2.22 (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 -2.22 suggests that the company is not a manipulator.

LXK' s 10-Year Beneish M-Score Range
Min: -3.41   Max: -1.88
Current: -2.22

-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 -2.71.


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 * 1.1481+0.528 * 1.0369+0.404 * 2.2892+0.892 * 1.0017+0.115 * 0.9349
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.162+4.679 * -0.0734-0.327 * 1.1215
=-2.22

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $464 Mil.
Revenue was 879.3 + 852 + 1022.9 + 918.1 = $3,672 Mil.
Gross Profit was 362.1 + 329.9 + 359.7 + 357.3 = $1,409 Mil.
Total Current Assets was $1,170 Mil.
Total Assets was $4,042 Mil.
Property, Plant and Equipment(Net PPE) was $765 Mil.
Depreciation, Depletion and Amortization(DDA) was $271 Mil.
Selling, General & Admin. Expense(SGA) was $952 Mil.
Total Current Liabilities was $1,212 Mil.
Long-Term Debt was $1,058 Mil.
Net Income was -36.3 + 19.7 + -25.6 + 37.9 = $-4 Mil.
Non Operating Income was 0.6 + 0.8 + -2 + -1 = $-2 Mil.
Cash Flow from Operations was -6.7 + -10.5 + 188.1 + 123.2 = $294 Mil.
Accounts Receivable was $403 Mil.
Revenue was 891.8 + 877.7 + 1006.1 + 890.5 = $3,666 Mil.
Gross Profit was 351.2 + 341.6 + 417.8 + 347.9 = $1,459 Mil.
Total Current Assets was $1,924 Mil.
Total Assets was $3,526 Mil.
Property, Plant and Equipment(Net PPE) was $799 Mil.
Depreciation, Depletion and Amortization(DDA) was $259 Mil.
Selling, General & Admin. Expense(SGA) was $818 Mil.
Total Current Liabilities was $1,066 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)
=(463.6 / 3672.3) / (403.1 / 3666.1)
=0.12624241 / 0.10995336
=1.1481

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)
=(329.9 / 3666.1) / (362.1 / 3672.3)
=0.39783421 / 0.38368325
=1.0369

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 - (1169.6 + 764.5) / 4041.5) / (1 - (1924.1 + 798.6) / 3525.8)
=0.52144006 / 0.22777809
=2.2892

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
=3672.3 / 3666.1
=1.0017

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))
=(258.5 / (258.5 + 798.6)) / (270.8 / (270.8 + 764.5))
=0.24453694 / 0.2615667
=0.9349

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)
=(951.8 / 3672.3) / (817.7 / 3666.1)
=0.25918362 / 0.22304356
=1.162

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)
=((1057.8 + 1212.4) / 4041.5) / ((699.7 + 1066.2) / 3525.8)
=0.56172213 / 0.50085087
=1.1215

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
=(-4.3 - -1.6 - 294.1) / 4041.5
=-0.0734

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 -2.22 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.88990.91761.01730.81091.16061.04280.96071.25680.89440.9213
GMI 1.07620.97211.0250.92761.00380.9330.95521.02610.93761.0362
AQI 1.22760.61310.98231.75120.85621.60921.03531.45111.07141.2089
SGI 0.98260.97830.97370.91040.85681.08240.99360.910.96581.0117
DEPI 0.90950.83431.05830.94451.01311.05510.89860.81181.04670.9473
SGAI 1.04341.01731.09571.09090.936511.09251.16221.04191.0837
LVGI 1.05941.24530.92741.21680.94010.93220.95271.01521.03191.0302
TATA -0.0641-0.1148-0.0866-0.0718-0.0741-0.0489-0.0194-0.0891-0.0582-0.0935
M-score -2.80-3.39-2.87-2.90-2.83-2.36-2.63-2.60-2.90-2.91

Lexmark International Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.1651.20671.00040.89450.87690.76180.79780.92130.9131.1481
GMI 1.03511.03721.00780.93760.92910.91960.94141.03621.04331.0369
AQI 1.02680.98721.06491.07141.04451.10131.30241.20891.23232.2892
SGI 0.89310.91310.93290.96570.99231.00231.01791.01171.00651.0017
DEPI 0.8340.81230.96751.04671.04481.06770.98080.94730.95160.9349
SGAI 1.19211.13211.09021.04161.01141.00651.00281.08391.08351.162
LVGI 1.03561.06091.0031.03191.0191.00941.0311.03021.03481.1215
TATA -0.0803-0.0751-0.0674-0.059-0.0569-0.0755-0.068-0.0939-0.0954-0.0734
M-score -2.83-2.77-2.84-2.90-2.89-3.05-2.89-2.91-2.92-2.22
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