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Lexmark International Inc (NYSE:LXK)
Beneish M-Score
-2.31 (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 -2.31 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: -2.31

-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 -2.68.


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 * 1.0761+0.528 * 0.966+0.404 * 1.965+0.892 * 0.9571+0.115 * 0.8544
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1895+4.679 * -0.0335-0.327 * 1.085
=-2.31

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $434 Mil.
Revenue was 968.8 + 851.1 + 879.3 + 852 = $3,551 Mil.
Gross Profit was 385.2 + 319.6 + 362.1 + 329.9 = $1,397 Mil.
Total Current Assets was $1,029 Mil.
Total Assets was $3,912 Mil.
Property, Plant and Equipment(Net PPE) was $740 Mil.
Depreciation, Depletion and Amortization(DDA) was $303 Mil.
Selling, General & Admin. Expense(SGA) was $1,011 Mil.
Total Current Liabilities was $1,172 Mil.
Long-Term Debt was $1,061 Mil.
Net Income was -10.7 + -15.2 + -36.3 + 19.7 = $-43 Mil.
Non Operating Income was -0.2 + -3.4 + 0.6 + -16.2 = $-19 Mil.
Cash Flow from Operations was 103.1 + 21.9 + -6.7 + -10.5 = $108 Mil.
Accounts Receivable was $422 Mil.
Revenue was 1022.9 + 918.1 + 891.8 + 877.7 = $3,711 Mil.
Gross Profit was 359.7 + 357.3 + 351.2 + 341.6 = $1,410 Mil.
Total Current Assets was $1,834 Mil.
Total Assets was $3,633 Mil.
Property, Plant and Equipment(Net PPE) was $786 Mil.
Depreciation, Depletion and Amortization(DDA) was $259 Mil.
Selling, General & Admin. Expense(SGA) was $888 Mil.
Total Current Liabilities was $1,211 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)
=(434.2 / 3551.2) / (421.6 / 3710.5)
=0.12226853 / 0.1136235
=1.0761

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)
=(319.6 / 3710.5) / (385.2 / 3551.2)
=0.37994879 / 0.39333183
=0.966

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 - (1029.3 + 740.2) / 3912.4) / (1 - (1834.3 + 786.1) / 3633.1)
=0.54772007 / 0.27874267
=1.965

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
=3551.2 / 3710.5
=0.9571

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))
=(259.4 / (259.4 + 786.1)) / (302.9 / (302.9 + 740.2))
=0.24811095 / 0.29038443
=0.8544

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)
=(1011.3 / 3551.2) / (888.3 / 3710.5)
=0.28477698 / 0.2394017
=1.1895

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)
=((1061.3 + 1171.5) / 3912.4) / ((699.7 + 1211.3) / 3633.1)
=0.57069829 / 0.52599708
=1.085

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
=(-42.5 - -19.2 - 107.8) / 3912.4
=-0.0335

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 -2.31 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 0.91761.01730.81091.16061.04280.96071.25680.89440.92131.0761
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

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.89450.87690.76180.79780.92130.9131.14811.14191.07611.1199
GMI 0.93640.92550.91370.93321.03621.04461.03941.04850.9660.9685
AQI 1.0751.04451.10131.30241.20771.23232.28921.84061.9651.9655
SGI 0.96570.99231.00231.01791.01171.00651.00170.97610.95710.9513
DEPI 1.04671.04481.06770.98080.94730.95160.93490.89620.85441.0189
SGAI 1.04291.00470.99180.98031.08391.08771.17131.25861.18951.2664
LVGI 1.03141.0191.00941.0311.03111.03481.12151.09431.0851.1049
TATA -0.0581-0.0545-0.0687-0.0601-0.0895-0.0862-0.0692-0.0575-0.0335-0.0565
M-score -2.90-2.88-3.02-2.85-2.89-2.87-2.20-2.36-2.31-2.38
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