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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.75 (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 -2.75 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: -2.75

-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 -2.55.


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 * 1.1483+0.528 * 0.9173+0.404 * 0.8357+0.892 * 0.9019+0.115 * 1.2783
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0915+4.679 * -0.035-0.327 * 1.1825
=-2.75

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $314 Mil.
Revenue was 509.927 + 479.622 + 540.933 + 560.709 = $2,091 Mil.
Gross Profit was 175.55 + 153.305 + 174.771 + 169.708 = $673 Mil.
Total Current Assets was $774 Mil.
Total Assets was $1,317 Mil.
Property, Plant and Equipment(Net PPE) was $432 Mil.
Depreciation, Depletion and Amortization(DDA) was $43 Mil.
Selling, General & Admin. Expense(SGA) was $163 Mil.
Total Current Liabilities was $240 Mil.
Long-Term Debt was $541 Mil.
Net Income was 61.931 + 53.914 + 62.009 + 58.733 = $237 Mil.
Non Operating Income was -2.26 + 0.945 + -3.4 + 1.683 = $-3 Mil.
Cash Flow from Operations was 74.267 + 79.679 + 65.167 + 66.629 = $286 Mil.
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.



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)
=(314.171 / 2091.191) / (303.334 / 2318.549)
=0.15023544 / 0.13082924
=1.1483

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)
=(684.765 / 2318.549) / (673.334 / 2091.191)
=0.29534204 / 0.32198589
=0.9173

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 - (773.791 + 431.813) / 1317.44) / (1 - (811.351 + 318.57) / 1257.67)
=0.08488888 / 0.10157593
=0.8357

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
=2091.191 / 2318.549
=0.9019

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))
=(41.466 / (41.466 + 318.57)) / (42.759 / (42.759 + 431.813))
=0.11517182 / 0.09010013
=1.2783

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)
=(163.213 / 2091.191) / (165.781 / 2318.549)
=0.07804787 / 0.07150205
=1.0915

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)
=((541.124 + 240.105) / 1317.44) / ((373.541 + 257.134) / 1257.67)
=0.59299019 / 0.50146302
=1.1825

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
=(236.587 - -3.032 - 285.742) / 1317.44
=-0.035

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 -2.75 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79891.02380.88651.07690.96150.90830.99361.06910.93711.0018
GMI 0.89070.96911.10940.64221.05571.10270.90691.00091.00550.8983
AQI 0.83710.73891.27120.76651.01591.12521.01030.81020.94330.8484
SGI 1.17461.08831.17640.9461.17471.19591.03431.02571.02410.9167
DEPI 1.17211.1911.32061.09690.93270.95820.97940.77511.1721.2509
SGAI 0.96030.9350.89031.04361.01480.92550.98351.04240.96841.0946
LVGI 0.92121.03341.05670.88070.98720.94381.34690.88711.12451.162
TATA 0.0329-0.04170.0635-0.04970.02070.0339-0.0158-0.01540.0043-0.0204
M-score -2.43-2.67-1.93-2.93-2.23-2.10-2.69-2.54-2.53-2.80

NewMarket Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0650.98981.00380.96660.93710.88280.92851.00651.00181.1483
GMI 0.99651.01341.02291.0171.00550.95340.94550.91050.89830.9173
AQI 0.81020.88231.01131.11980.94330.90740.83020.780.84840.8357
SGI 1.02961.03851.05691.04721.02411.00940.96790.94330.91670.9019
DEPI 0.77510.8171.20371.16371.1721.17221.16411.20981.25091.2783
SGAI 1.03840.99480.98830.97690.96841.00461.03971.04391.09461.0915
LVGI 0.88710.89750.98661.0821.12451.09711.01051.20441.1621.1825
TATA -0.0154-0.00390.01640.00490.0043-0.032-0.03-0.0138-0.0204-0.035
M-score -2.54-2.50-2.30-2.39-2.53-2.80-2.80-2.78-2.80-2.75
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