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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

NEU' s 10-Year Beneish M-Score Range
Min: -4.25   Max: -1.97
Current: -2.5

-4.25
-1.97

During the past 13 years, the highest Beneish M-Score of NewMarket Corp was -1.97. The lowest was -4.25. And the median was -2.65.


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 * 0.9898+0.528 * 1.0134+0.404 * 0.8823+0.892 * 1.0385+0.115 * 0.817
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9948+4.679 * -0.0039-0.327 * 0.8975
=-2.50

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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.
Net Income was 57.523 + 54.001 + 78.896 + 64.01 = $254 Mil.
Non Operating Income was -2.216 + 1.754 + -0.613 + 5.374 = $4 Mil.
Cash Flow from Operations was 4.381 + 69.535 + 85.493 + 95.778 = $255 Mil.
Accounts Receivable was $331 Mil.
Revenue was 559.75 + 513.322 + 551.187 + 587.548 = $2,212 Mil.
Gross Profit was 168.407 + 138.861 + 160.269 + 163.609 = $631 Mil.
Total Current Assets was $758 Mil.
Total Assets was $1,281 Mil.
Property, Plant and Equipment(Net PPE) was $361 Mil.
Depreciation, Depletion and Amortization(DDA) was $45 Mil.
Selling, General & Admin. Expense(SGA) was $158 Mil.
Total Current Liabilities was $227 Mil.
Long-Term Debt was $425 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)
=(340.407 / 2297.027) / (331.155 / 2211.807)
=0.1481946 / 0.14972147
=0.9898

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)
=(151.638 / 2211.807) / (161.93 / 2297.027)
=0.28535311 / 0.28158964
=1.0134

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 - (853.795 + 285.788) / 1283.228) / (1 - (758.214 + 360.594) / 1281.389)
=0.11194036 / 0.12687872
=0.8823

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
=2297.027 / 2211.807
=1.0385

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))
=(44.703 / (44.703 + 360.594)) / (44.606 / (44.606 + 285.788))
=0.11029689 / 0.1350085
=0.817

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)
=(163.485 / 2297.027) / (158.241 / 2211.807)
=0.07117243 / 0.07154376
=0.9948

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)
=((355.482 + 231.033) / 1283.228) / ((425.422 + 227.142) / 1281.389)
=0.45706219 / 0.509263
=0.8975

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
=(254.43 - 4.299 - 255.187) / 1283.228
=-0.0039

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 -2.50 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 1.01340.97390.89080.96030.83511.11591.02110.90291.03721.0117
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 -2.62-2.51-2.44-2.73-1.97-2.89-2.18-2.10-2.65-2.59

NewMarket Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.90290.92410.93190.95291.03591.05811.02451.03851.0130.9898
GMI 1.10271.05251.00210.9510.9110.93420.94510.97890.99651.0134
AQI 1.12521.14481.21341.00911.01031.02830.92470.85270.81020.8823
SGI 1.19591.15381.09621.04861.03031.00350.99771.01371.02961.0385
DEPI 0.95890.93950.94981.0071.01290.9960.7520.76890.77510.817
SGAI 0.92550.89820.95931.00690.98731.05071.02841.02971.03840.9948
LVGI 0.94380.86760.78090.68911.34691.41611.46831.58850.88710.8975
TATA 0.03390.00940.0152-0.0121-0.01640.0111-0.0433-0.0282-0.0154-0.0039
M-score -2.10-2.23-2.23-2.46-2.65-2.54-2.91-2.86-2.59-2.50
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