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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.77 (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.

NewMarket Corp has a M-score of -2.77 suggests that the company is not a manipulator.

NEU' s 10-Year Beneish M-Score Range
Min: -3.74   Max: 16.53
Current: -2.77

-3.74
16.53

During the past 13 years, the highest Beneish M-Score of NewMarket Corp was 16.53. The lowest was -3.74. 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 NewMarket Corp 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 * 1.0064+0.528 * 1.0258+0.404 * 1.0113+0.892 * 1.0542+0.115 * 1.4483
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9909+4.679 * -0.0887-0.327 * 0.9866
=-2.77

* 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 $348 Mil.
Revenue was 620.438 + 576.422 + 556.371 + 580.455 = $2,334 Mil.
Gross Profit was 180.746 + 161.93 + 151.638 + 163.823 = $658 Mil.
Total Current Assets was $833 Mil.
Total Assets was $1,272 Mil.
Property, Plant and Equipment(Net PPE) was $290 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $164 Mil.
Total Current Liabilities was $246 Mil.
Long-Term Debt was $353 Mil.
Net Income was 66.764 + 57.523 + 54.001 + 78.896 = $257 Mil.
Non Operating Income was -2.203 + -2.216 + 1.754 + -0.613 = $-3 Mil.
Cash Flow from Operations was 80.135 + 4.381 + 64.677 + 224.121 = $373 Mil.
Accounts Receivable was $328 Mil.
Revenue was 583.779 + 562.608 + 516.18 + 551.187 = $2,214 Mil.
Gross Profit was 169.428 + 170.197 + 140.536 + 160.269 = $640 Mil.
Total Current Assets was $857 Mil.
Total Assets was $1,277 Mil.
Property, Plant and Equipment(Net PPE) was $273 Mil.
Depreciation, Depletion and Amortization(DDA) was $59 Mil.
Selling, General & Admin. Expense(SGA) was $157 Mil.
Total Current Liabilities was $245 Mil.
Long-Term Debt was $364 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)
=(347.63 / 2333.686) / (327.67 / 2213.754)
=0.14896177 / 0.14801554
=1.0064

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)
=(161.93 / 2213.754) / (180.746 / 2333.686)
=0.28929592 / 0.28201609
=1.0258

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 - (833.032 + 290.447) / 1272.35) / (1 - (856.618 + 272.531) / 1276.879)
=0.11700475 / 0.11569616
=1.0113

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
=2333.686 / 2213.754
=1.0542

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))
=(59.449 / (59.449 + 272.531)) / (40.979 / (40.979 + 290.447))
=0.17907404 / 0.12364449
=1.4483

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)
=(164.477 / 2333.686) / (157.463 / 2213.754)
=0.07047949 / 0.0711294
=0.9909

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)
=((353.497 + 246.058) / 1272.35) / ((364.437 + 245.422) / 1276.879)
=0.47121861 / 0.47761691
=0.9866

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
=(257.184 - -3.278 - 373.314) / 1272.35
=-0.0887

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.

NewMarket Corp has a M-score of -2.77 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.

NewMarket Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.01110.97960.79891.02380.88651.11591.02110.90291.03190.9411
GMI 1.11.0710.89070.96911.10940.64221.05571.10270.90691.0009
AQI 0.86810.87450.83710.73891.27120.76721.0151.12520.97550.839
SGI 1.18221.20291.17461.08831.17640.9461.17471.19591.03431.0257
DEPI 1.05721.11011.17211.1911.32061.10080.89810.99160.97940.7751
SGAI 0.92060.83090.96030.9350.89031.04361.01480.92550.98351.0424
LVGI 0.95080.95190.92121.03341.05670.87960.98840.94381.35420.8824
TATA -0.0748-0.04880.013-0.04170.0635-0.04980.02180.0561-0.0238-0.1116
M-score -2.62-2.50-2.52-2.67-1.93-2.89-2.18-2.00-2.71-3.09

NewMarket Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.92410.93070.95161.13021.0541.02321.03720.93870.99361.0064
GMI 1.05251.00040.94940.90830.93010.9440.97770.99791.01791.0258
AQI 1.14481.21341.00910.97551.02830.92470.85270.8390.88231.0113
SGI 1.15381.09761.051.0331.00740.9991.0151.02831.03451.0542
DEPI 0.00560.0065160.3506161.1738166.781991.17550.6310.63930.66921.4483
SGAI 0.89820.95811.00560.98471.04661.02711.02841.03980.99870.9909
LVGI 0.86760.78090.68911.35421.41611.46831.58850.88240.89750.9866
TATA 0.57250.5851-0.019-0.0210.0118-0.0597-0.1469-0.132-0.1245-0.0887
M-score 0.300.3315.8315.8216.537.41-3.43-3.20-3.08-2.77
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