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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

NEU' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.93
Current: -2.8

-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 * 0.8828+0.528 * 0.9534+0.404 * 0.9074+0.892 * 1.0094+0.115 * 1.1722
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0046+4.679 * -0.032-0.327 * 1.0971
=-2.80

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $303 Mil.
Revenue was 559.566 + 548.878 + 589.667 + 620.438 = $2,319 Mil.
Gross Profit was 181.272 + 157.528 + 165.219 + 180.746 = $685 Mil.
Total Current Assets was $811 Mil.
Total Assets was $1,258 Mil.
Property, Plant and Equipment(Net PPE) was $319 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $166 Mil.
Total Current Liabilities was $257 Mil.
Long-Term Debt was $374 Mil.
Net Income was 63.947 + 52.055 + 56.913 + 66.764 = $240 Mil.
Non Operating Income was -2.325 + -3.02 + 0.385 + -2.203 = $-7 Mil.
Cash Flow from Operations was 56.552 + 73.28 + 77.162 + 80.135 = $287 Mil.
Accounts Receivable was $340 Mil.
Revenue was 576.422 + 556.371 + 580.455 + 583.779 = $2,297 Mil.
Gross Profit was 161.93 + 151.638 + 163.823 + 169.428 = $647 Mil.
Total Current Assets was $854 Mil.
Total Assets was $1,283 Mil.
Property, Plant and Equipment(Net PPE) was $286 Mil.
Depreciation, Depletion and Amortization(DDA) was $45 Mil.
Selling, General & Admin. Expense(SGA) was $163 Mil.
Total Current Liabilities was $231 Mil.
Long-Term Debt was $355 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)
=(303.334 / 2318.549) / (340.407 / 2297.027)
=0.13082924 / 0.1481946
=0.8828

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)
=(157.528 / 2297.027) / (181.272 / 2318.549)
=0.28158964 / 0.29534204
=0.9534

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 - (811.351 + 318.57) / 1257.67) / (1 - (853.795 + 285.788) / 1283.228)
=0.10157593 / 0.11194036
=0.9074

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
=2318.549 / 2297.027
=1.0094

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))
=(44.606 / (44.606 + 285.788)) / (41.466 / (41.466 + 318.57))
=0.1350085 / 0.11517182
=1.1722

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)
=(165.781 / 2318.549) / (163.485 / 2297.027)
=0.07150205 / 0.07117243
=1.0046

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)
=((373.541 + 257.134) / 1257.67) / ((355.482 + 231.033) / 1283.228)
=0.50146302 / 0.45706219
=1.0971

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
=(239.679 - -7.163 - 287.129) / 1257.67
=-0.032

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 -2.80 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.97960.79891.02380.88651.07690.96150.90830.99871.06360.9371
GMI 1.0710.89070.96911.10940.64221.05571.10270.91240.9951.0055
AQI 0.87450.83710.73891.27120.76651.01591.12521.01030.81020.9433
SGI 1.20291.17461.08831.17640.9461.17471.19591.0291.0311.0241
DEPI 1.11011.17211.1911.32061.09690.90130.95891.01290.77511.172
SGAI 0.83090.96030.9350.89031.04361.01480.92550.98851.03710.9684
LVGI 0.95190.92121.03341.05670.88070.98720.94381.34690.88711.1245
TATA -0.04880.013-0.04170.0635-0.04970.02180.0339-0.0164-0.01540.0043
M-score -2.50-2.52-2.67-1.93-2.93-2.23-2.10-2.68-2.54-2.53

NewMarket Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.99751.05811.02451.03851.0650.98981.00380.96660.93710.8828
GMI 0.9110.93420.94510.97890.99651.01341.02291.0171.00550.9534
AQI 1.01031.02830.92470.85270.81020.88231.01131.11980.94330.9074
SGI 1.03031.00350.99771.01371.02961.03851.05691.04721.02411.0094
DEPI 1.01290.9960.7520.76890.77510.8171.20371.16371.1721.1722
SGAI 0.98731.05071.02841.02971.03840.99480.98830.97690.96841.0046
LVGI 1.34691.41611.46831.58850.88710.89750.98661.0821.12451.0971
TATA -0.01640.0111-0.0433-0.0282-0.0154-0.00390.01640.00490.0043-0.032
M-score -2.68-2.54-2.91-2.86-2.54-2.50-2.30-2.39-2.53-2.80
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