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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

NEU' s Beneish M-Score Range Over the Past 10 Years
Min: -4.2   Max: -1.93
Current: -2.95

-4.2
-1.93

During the past 13 years, the highest Beneish M-Score of NewMarket Corp was -1.93. The lowest was -4.20. And the median was -2.57.


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 * 1.0615+0.528 * 0.9155+0.404 * 0.6378+0.892 * 0.9174+0.115 * 1.2015
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0971+4.679 * -0.061-0.327 * 0.9595
=-2.95

* 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 $303 Mil.
Revenue was 516.09 + 521.807 + 509.927 + 479.622 = $2,027 Mil.
Gross Profit was 177.401 + 178.4 + 175.55 + 153.305 = $685 Mil.
Total Current Assets was $849 Mil.
Total Assets was $1,403 Mil.
Property, Plant and Equipment(Net PPE) was $475 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $163 Mil.
Total Current Liabilities was $268 Mil.
Long-Term Debt was $531 Mil.
Net Income was 71.449 + 64.389 + 61.931 + 53.914 = $252 Mil.
Non Operating Income was 0.698 + -1.266 + -2.26 + 0.945 = $-2 Mil.
Cash Flow from Operations was 71.509 + 113.714 + 74.267 + 79.679 = $339 Mil.
Accounts Receivable was $311 Mil.
Revenue was 540.933 + 560.709 + 559.566 + 548.878 = $2,210 Mil.
Gross Profit was 174.771 + 169.708 + 181.272 + 157.528 = $683 Mil.
Total Current Assets was $804 Mil.
Total Assets was $1,289 Mil.
Property, Plant and Equipment(Net PPE) was $370 Mil.
Depreciation, Depletion and Amortization(DDA) was $42 Mil.
Selling, General & Admin. Expense(SGA) was $162 Mil.
Total Current Liabilities was $258 Mil.
Long-Term Debt was $508 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)
=(302.931 / 2027.446) / (311.087 / 2210.086)
=0.14941508 / 0.14075787
=1.0615

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)
=(683.279 / 2210.086) / (684.656 / 2027.446)
=0.30916399 / 0.33769383
=0.9155

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 - (849.147 + 474.719) / 1403.385) / (1 - (804.041 + 370.431) / 1288.98)
=0.05666228 / 0.08883613
=0.6378

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
=2027.446 / 2210.086
=0.9174

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))
=(41.672 / (41.672 + 370.431)) / (43.626 / (43.626 + 474.719))
=0.10112035 / 0.08416402
=1.2015

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)
=(163.496 / 2027.446) / (162.445 / 2210.086)
=0.08064136 / 0.07350166
=1.0971

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)
=((531.404 + 268.093) / 1403.385) / ((507.571 + 257.757) / 1288.98)
=0.56969185 / 0.59374699
=0.9595

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
=(251.683 - -1.883 - 339.169) / 1403.385
=-0.061

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 -2.95 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.

NewMarket Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79891.02380.88651.07690.96150.91320.99341.06360.93711.1416
GMI 0.89070.96911.10940.64221.05571.11090.90570.9951.00550.8983
AQI 0.83710.73891.27120.76651.01591.12521.01030.81020.94330.8712
SGI 1.17461.08831.17640.9461.17471.18961.03451.0311.02410.9167
DEPI 1.17211.1911.32061.09690.90130.95891.01290.77511.1721.2509
SGAI 0.96030.9350.89031.04361.01480.93040.98331.03710.96841.0946
LVGI 0.92121.03341.05670.88070.98720.94381.34690.88711.12451.1597
TATA 0.0329-0.04170.0635-0.04970.02180.0339-0.0164-0.01540.0043-0.0205
M-score -2.43-2.67-1.93-2.93-2.23-2.10-2.69-2.54-2.53-2.67

NewMarket Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.00380.96660.93710.88280.92851.00651.14161.14831.07061.0615
GMI 1.02291.0171.00550.95340.94550.91050.89830.91730.89750.9155
AQI 1.01131.11980.94330.90740.83020.780.87120.83570.8790.6378
SGI 1.05691.04721.02411.00940.96790.94330.91670.90190.90860.9174
DEPI 1.20371.16371.1721.17221.16411.20981.25091.27831.21271.2015
SGAI 0.98830.97690.96841.00461.03971.04391.09461.09151.08351.0971
LVGI 0.98661.0821.12451.09711.01051.20441.15971.18251.20480.9595
TATA 0.01640.00490.0043-0.032-0.03-0.0138-0.0205-0.035-0.0623-0.061
M-score -2.30-2.39-2.53-2.80-2.80-2.78-2.67-2.75-2.95-2.95
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