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Lexmark International Inc (NYSE:LXK)
Beneish M-Score
-3.03 (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 -3.03 suggests that the company is not a manipulator.

LXK' s 10-Year Beneish M-Score Range
Min: -3.4   Max: -1.88
Current: -3.03

-3.4
-1.88

During the past 13 years, the highest Beneish M-Score of Lexmark International Inc was -1.88. The lowest was -3.40. 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 * 0.7618+0.528 * 0.9161+0.404 * 1.1013+0.892 * 1.0023+0.115 * 1.0677
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9998+4.679 * -0.0724-0.327 * 1.0094
=-3.03

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
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 + 423 + 346.2 = $1,462 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 $811 Mil.
Total Current Liabilities was $1,066 Mil.
Long-Term Debt was $700 Mil.
Net Income was 37.5 + 29.3 + 109.6 + 28.5 = $205 Mil.
Non Operating Income was 0.3 + -0.7 + -1.3 + -0.7 = $-2 Mil.
Cash Flow from Operations was 101.7 + 10 + 210.4 + 140.3 = $462 Mil.
Accounts Receivable was $528 Mil.
Revenue was 886.7 + 884.3 + 967.4 + 919.2 = $3,658 Mil.
Gross Profit was 341.9 + 336.4 + 329.6 + 328.4 = $1,336 Mil.
Total Current Assets was $2,020 Mil.
Total Assets was $3,544 Mil.
Property, Plant and Equipment(Net PPE) was $791 Mil.
Depreciation, Depletion and Amortization(DDA) was $280 Mil.
Selling, General & Admin. Expense(SGA) was $810 Mil.
Total Current Liabilities was $1,059 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)
=(403.1 / 3666.1) / (527.9 / 3657.6)
=0.10995336 / 0.14432962
=0.7618

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)
=(341.6 / 3657.6) / (351.2 / 3666.1)
=0.36534886 / 0.3987889
=0.9161

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 - (1924.1 + 798.6) / 3525.8) / (1 - (2019.8 + 791) / 3543.7)
=0.22777809 / 0.20681773
=1.1013

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
=3666.1 / 3657.6
=1.0023

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))
=(279.5 / (279.5 + 791)) / (258.5 / (258.5 + 798.6))
=0.26109295 / 0.24453694
=1.0677

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)
=(811.2 / 3666.1) / (809.5 / 3657.6)
=0.22127056 / 0.22131999
=0.9998

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)
=((699.7 + 1066.2) / 3525.8) / ((699.6 + 1058.8) / 3543.7)
=0.50085087 / 0.49620453
=1.0094

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
=(204.9 - -2.4 - 462.4) / 3525.8
=-0.0724

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 -3.03 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.08230.88990.91761.01730.81091.16061.04280.96071.25680.8944
GMI 0.96391.07620.97211.0250.92761.00380.9330.95521.02740.9364
AQI 0.95321.22760.61310.98231.75120.85621.60921.03531.44771.075
SGI 1.11760.98260.97830.97370.91040.85681.08240.99360.910.9658
DEPI 1.18330.90950.83431.05830.94451.01311.05510.89860.81181.0467
SGAI 0.97451.04341.01731.09571.09090.936511.09251.16081.0432
LVGI 1.01531.05941.24530.92741.21680.94010.93220.95271.01481.0314
TATA -0.0501-0.0641-0.1148-0.0866-0.0763-0.0741-0.0489-0.0194-0.0872-0.0581
M-score -2.55-2.80-3.39-2.87-2.92-2.83-2.36-2.63-2.59-2.90

Lexmark International Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.99791.12851.21041.25681.1651.20671.00040.89450.87690.7618
GMI 0.95520.97680.99241.02751.03651.03861.01040.93410.92560.9161
AQI 1.53381.55321.51041.44771.02680.98721.06491.0751.04451.1013
SGI 0.98570.95320.92230.91010.89310.91310.93290.96570.99231.0023
DEPI 0.87970.88950.81740.81180.8340.81230.96751.04671.04481.0677
SGAI 1.06421.10071.14171.16091.19071.13071.09331.03461.00460.9998
LVGI 0.95280.991.02291.01481.03561.06091.0031.03141.0191.0094
TATA -0.0273-0.0325-0.0768-0.0872-0.0783-0.0731-0.0659-0.0561-0.0536-0.0724
M-score -2.44-2.37-2.57-2.59-2.82-2.76-2.84-2.89-2.87-3.03
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