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NewMarket Corp (NYSE:NEU)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

NEU' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: -1.93
Current: -2.77

-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 -2.68.


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 * 1.0065+0.528 * 0.9105+0.404 * 0.78+0.892 * 0.9433+0.115 * 1.2098
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0439+4.679 * -0.0128-0.327 * 1.2044
=-2.77

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 62.009 + 58.733 + 63.947 + 52.055 = $237 Mil.
Non Operating Income was 3.4 + 1.683 + -2.325 + -11.088 = $-8 Mil.
Cash Flow from Operations was 65.167 + 66.629 + 56.552 + 73.28 = $262 Mil.
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.



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)
=(311.087 / 2210.086) / (327.641 / 2342.898)
=0.14075787 / 0.13984433
=1.0065

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)
=(169.708 / 2342.898) / (174.771 / 2210.086)
=0.28150308 / 0.30916399
=0.9105

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 - (804.041 + 370.431) / 1288.98) / (1 - (844.142 + 297.447) / 1288.318)
=0.08883613 / 0.11389191
=0.78

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
=2210.086 / 2342.898
=0.9433

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))
=(41.462 / (41.462 + 297.447)) / (41.672 / (41.672 + 370.431))
=0.12233963 / 0.10112035
=1.2098

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)
=(162.445 / 2210.086) / (164.967 / 2342.898)
=0.07350166 / 0.07041152
=1.0439

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)
=((507.571 + 257.757) / 1288.98) / ((384.512 + 250.581) / 1288.318)
=0.59374699 / 0.49296292
=1.2044

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
=(236.744 - -8.33 - 261.628) / 1288.98
=-0.0128

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 -2.77 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 0.79891.02380.88651.07690.96150.91320.99341.06360.93711.1416
GMI 0.89070.96911.10940.64221.05571.11090.90570.9951.00550.8983
AQI 0.83710.73891.27120.76651.01591.12521.01030.81020.94330.8484
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 0.92121.03341.05670.88070.98720.94381.34690.88711.12451.162
TATA 0.013-0.04170.0635-0.04970.02180.0339-0.0164-0.01540.0043-0.015
M-score -2.52-2.67-1.93-2.93-2.23-2.10-2.69-2.54-2.53-2.65

NewMarket Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.03311.0650.98981.00380.96660.93710.88280.92851.00651.1416
GMI 0.97280.99651.01341.02291.0171.00550.95340.94550.91050.8983
AQI 0.85270.81020.88231.01131.11980.94330.90740.83020.780.8484
SGI 1.0191.02961.03851.05691.04721.02411.00940.96790.94330.9167
DEPI 0.76890.77510.8171.20371.16371.1721.17221.16411.20981.2509
SGAI 1.02431.03840.99480.98830.97690.96841.00461.03971.04391.0946
LVGI 1.58850.88710.89750.98661.0821.12451.09711.01051.20441.162
TATA -0.0282-0.0154-0.00390.01640.00550.0115-0.025-0.0231-0.0128-0.0203
M-score -2.86-2.54-2.50-2.30-2.39-2.50-2.77-2.77-2.77-2.67
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