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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.39 (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 -2.39 suggests that the company is not a manipulator.

NEU' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.93
Current: -2.39

-3.74
-1.93

During the past 13 years, the highest Beneish M-Score of NewMarket Corp was -1.93. The lowest was -3.74. And the median was -2.66.


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 * 0.9666+0.528 * 1.017+0.404 * 1.1198+0.892 * 1.0472+0.115 * 1.1637
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9769+4.679 * 0.0049-0.327 * 1.082
=-2.39

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $328 Mil.
Revenue was 589.667 + 620.438 + 576.422 + 556.371 = $2,343 Mil.
Gross Profit was 165.219 + 180.746 + 161.93 + 151.638 = $660 Mil.
Total Current Assets was $844 Mil.
Total Assets was $1,288 Mil.
Property, Plant and Equipment(Net PPE) was $297 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $165 Mil.
Total Current Liabilities was $251 Mil.
Long-Term Debt was $385 Mil.
Net Income was 56.913 + 66.764 + 57.523 + 54.001 = $235 Mil.
Non Operating Income was 0.385 + -2.203 + -2.216 + 1.754 = $-2 Mil.
Cash Flow from Operations was 77.162 + 80.135 + 4.381 + 69.535 = $231 Mil.
Accounts Receivable was $324 Mil.
Revenue was 580.455 + 583.779 + 559.75 + 513.322 = $2,237 Mil.
Gross Profit was 163.823 + 169.428 + 168.407 + 138.861 = $641 Mil.
Total Current Assets was $926 Mil.
Total Assets was $1,345 Mil.
Property, Plant and Equipment(Net PPE) was $282 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $161 Mil.
Total Current Liabilities was $263 Mil.
Long-Term Debt was $349 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)
=(327.641 / 2342.898) / (323.669 / 2237.306)
=0.13984433 / 0.14466908
=0.9666

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)
=(180.746 / 2237.306) / (165.219 / 2342.898)
=0.2862903 / 0.28150308
=1.017

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 - (844.142 + 297.447) / 1288.318) / (1 - (926.077 + 282.339) / 1345.238)
=0.11389191 / 0.1017084
=1.1198

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
=2342.898 / 2237.306
=1.0472

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))
=(46.866 / (46.866 + 282.339)) / (41.462 / (41.462 + 297.447))
=0.14236114 / 0.12233963
=1.1637

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)
=(164.967 / 2342.898) / (161.254 / 2237.306)
=0.07041152 / 0.07207508
=0.9769

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)
=((384.512 + 250.581) / 1288.318) / ((349.452 + 263.416) / 1345.238)
=0.49296292 / 0.45558332
=1.082

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
=(235.201 - -2.28 - 231.213) / 1288.318
=0.0049

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 -2.39 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 1.01110.97960.79891.02380.88651.07690.96150.90830.99871.0636
GMI 1.11.0710.89070.96911.10940.64221.05571.10270.91240.995
AQI 0.86810.87450.83710.73891.27120.76651.01591.12521.01030.8102
SGI 1.18221.20291.17461.08831.17640.9461.17471.19591.0291.031
DEPI 1.05721.11011.17211.1911.32061.09690.90130.95891.01290.7751
SGAI 0.92060.83090.96030.9350.89031.04361.01480.92550.98851.0371
LVGI 0.95080.95190.92121.03341.05670.88070.98720.94381.34690.8871
TATA -0.0748-0.04880.013-0.04170.0635-0.04970.02180.0339-0.0164-0.0154
M-score -2.62-2.50-2.52-2.67-1.93-2.93-2.23-2.10-2.68-2.54

NewMarket Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93190.95290.99751.05811.02451.03851.0650.98981.00380.9666
GMI 1.00210.9510.9110.93420.94510.97890.99651.01341.02291.017
AQI 1.21341.00911.01031.02830.92470.85270.81020.88231.01131.1198
SGI 1.09621.04861.03031.00350.99771.01371.02961.03851.05691.0472
DEPI 0.94981.0071.01290.9960.7520.76890.77510.8171.20371.1637
SGAI 0.95931.00690.98731.05071.02841.02971.03840.99480.98830.9769
LVGI 0.78090.68911.34691.41611.46831.58850.88710.89750.98661.082
TATA 0.0152-0.0121-0.01640.0111-0.0433-0.0282-0.0154-0.00390.01640.0049
M-score -2.23-2.46-2.68-2.54-2.91-2.86-2.54-2.50-2.30-2.39
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