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Lexmark International Inc (NYSE:LXK)
Beneish M-Score
-2.97 (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 -2.97 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: -2.97

-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 -2.69.


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 * 0.9319+0.528 * 0.9751+0.404 * 1.0486+0.892 * 0.9657+0.115 * 0.9281
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0503+4.679 * -0.0813-0.327 * 1.008
=-2.97

* 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 $398 Mil.
Revenue was 843.9 + 862.6 + 806.2 + 968.8 = $3,482 Mil.
Gross Profit was 329.4 + 337 + 306.4 + 385.2 = $1,358 Mil.
Total Current Assets was $923 Mil.
Total Assets was $3,637 Mil.
Property, Plant and Equipment(Net PPE) was $683 Mil.
Depreciation, Depletion and Amortization(DDA) was $293 Mil.
Selling, General & Admin. Expense(SGA) was $1,021 Mil.
Total Current Liabilities was $1,044 Mil.
Long-Term Debt was $1,018 Mil.
Net Income was 18.3 + -35.4 + -39.4 + -10.7 = $-67 Mil.
Non Operating Income was -1.3 + -0.7 + -0.4 + -0.2 = $-3 Mil.
Cash Flow from Operations was 25.5 + 23.5 + 79.1 + 103.1 = $231 Mil.
Accounts Receivable was $442 Mil.
Revenue was 851.1 + 879.3 + 852 + 1022.9 = $3,605 Mil.
Gross Profit was 319.6 + 362.1 + 329.9 + 359.7 = $1,371 Mil.
Total Current Assets was $1,120 Mil.
Total Assets was $3,983 Mil.
Property, Plant and Equipment(Net PPE) was $742 Mil.
Depreciation, Depletion and Amortization(DDA) was $286 Mil.
Selling, General & Admin. Expense(SGA) was $1,007 Mil.
Total Current Liabilities was $1,144 Mil.
Long-Term Debt was $1,097 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)
=(397.5 / 3481.5) / (441.7 / 3605.3)
=0.11417492 / 0.12251408
=0.9319

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)
=(1371.3 / 3605.3) / (1358 / 3481.5)
=0.3803567 / 0.39006175
=0.9751

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 - (923.3 + 683.2) / 3637.3) / (1 - (1120.3 + 742) / 3983.1)
=0.55832623 / 0.5324496
=1.0486

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
=3481.5 / 3605.3
=0.9657

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))
=(286.4 / (286.4 + 742)) / (292.9 / (292.9 + 683.2))
=0.27849086 / 0.30007171
=0.9281

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)
=(1021.2 / 3481.5) / (1006.9 / 3605.3)
=0.29332184 / 0.27928328
=1.0503

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)
=((1017.9 + 1044.3) / 3637.3) / ((1096.8 + 1143.6) / 3983.1)
=0.56695901 / 0.56247646
=1.008

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
=(-67.2 - -2.6 - 231.2) / 3637.3
=-0.0813

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 -2.97 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.

Lexmark International Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.91761.01730.81091.16061.04280.96071.25680.89440.92131.0761
GMI 0.97211.0250.92761.00380.9330.95521.02740.93641.03620.966
AQI 0.61310.98231.75120.85621.60921.03531.44771.0751.20771.965
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 1.24530.92741.21680.94010.93220.95271.01481.03141.03111.085
TATA -0.1148-0.0866-0.0718-0.0741-0.0489-0.0194-0.0872-0.0581-0.0935-0.0369
M-score -3.39-2.87-2.90-2.83-2.36-2.63-2.59-2.90-2.91-2.33

Lexmark International Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.76180.79780.92130.9131.14811.14191.07611.11990.84710.9319
GMI 0.91370.93321.03621.04461.03941.04850.9660.96850.99280.9751
AQI 1.10131.30241.20771.23232.28921.84061.9651.96551.07841.0486
SGI 1.00231.01791.01171.00651.00170.97610.95710.95130.950.9657
DEPI 1.06770.98080.94730.95160.93490.89620.85440.840.86610.9281
SGAI 0.99180.98031.08391.08771.1751.26231.19311.26991.16171.0503
LVGI 1.00941.0311.03111.03481.12151.09431.0851.10491.01231.008
TATA -0.0687-0.0601-0.0895-0.0905-0.0725-0.0609-0.0369-0.0767-0.0882-0.0813
M-score -3.02-2.85-2.89-2.89-2.22-2.38-2.33-2.50-3.10-2.97
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