Linamar (Linamar) Beneish M-Score : -2.58 (As of Apr. 25, 2024)

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What is Linamar Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.58 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Linamar's Beneish M-Score or its related term are showing as below:

LIMAF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29 Med: -2.54 Max: -2.21
Current: -2.58

During the past 13 years, the highest Beneish M-Score of Linamar was -2.21. The lowest was -3.29. And the median was -2.54.

Linamar Beneish M-Score Historical Data

The historical data trend for Linamar's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Linamar Beneish M-Score Chart

Linamar Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.96

-3.29

-2.79

-2.21

-2.58

Linamar Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.21	-2.38	-2.52	-2.51	-2.58

Competitive Comparison of Linamar's Beneish M-Score

For the Auto Parts subindustry, Linamar's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Linamar's Beneish M-Score Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Linamar's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Linamar's Beneish M-Score falls into.

Linamar Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Linamar for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9453

0.528 * 0.905

0.404 * 0.9162

0.892 * 1.1959

0.115 * 1.1926

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0421

4.679 * -0.027096

0.327 * 1.0765

-2.58

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $1,050 Mil.
Revenue was 1829.066 + 1798.951 + 1921.447 + 1675.555 = $7,225 Mil.
Gross Profit was 238.654 + 251.491 + 272.357 + 219.632 = $982 Mil.
Total Current Assets was $2,979 Mil.
Total Assets was $7,342 Mil.
Property, Plant and Equipment(Net PPE) was $2,713 Mil.
Depreciation, Depletion and Amortization(DDA) was $365 Mil.
Selling, General, & Admin. Expense(SGA) was $391 Mil.
Total Current Liabilities was $1,878 Mil.
Long-Term Debt & Capital Lease Obligation was $1,291 Mil.
Net Income was 77.785 + 108.424 + 101.604 + 85.505 = $373 Mil.
Non Operating Income was -16.158 + 9.925 + -12.418 + 0.634 = $-18 Mil.
Cash Flow from Operations was 206.033 + 55.108 + 196.345 + 132.798 = $590 Mil.

Total Receivables was $929 Mil.
Revenue was 1516.407 + 1572.939 + 1547.673 + 1404.494 = $6,042 Mil.
Gross Profit was 183.176 + 208.342 + 195.148 + 156.548 = $743 Mil.
Total Current Assets was $2,719 Mil.
Total Assets was $6,313 Mil.
Property, Plant and Equipment(Net PPE) was $2,046 Mil.
Depreciation, Depletion and Amortization(DDA) was $337 Mil.
Selling, General, & Admin. Expense(SGA) was $314 Mil.
Total Current Liabilities was $1,587 Mil.
Long-Term Debt & Capital Lease Obligation was $943 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(1050.204 / 7225.019)	/	(928.963 / 6041.513)
	=	0.145357	/	0.153763
	=	0.9453

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)
	=	(743.214 / 6041.513)	/	(982.134 / 7225.019)
	=	0.123018	/	0.135935
	=	0.905

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (2979.255 + 2713.221) / 7342.352)	/	(1 - (2718.65 + 2046.162) / 6313.133)
	=	0.224707	/	0.245254
	=	0.9162

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	7225.019	/	6041.513
	=	1.1959

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(336.794 / (336.794 + 2046.162))	/	(364.765 / (364.765 + 2713.221))
	=	0.141335	/	0.118508
	=	1.1926

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(390.813 / 7225.019)	/	(313.596 / 6041.513)
	=	0.054092	/	0.051907
	=	1.0421

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((1290.859 + 1877.545) / 7342.352)	/	((943.424 + 1587.357) / 6313.133)
	=	0.431524	/	0.400876
	=	1.0765

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
	=	(373.318 - -18.017	-	590.284)	/	7342.352
	=	-0.027096

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Linamar has a M-score of -2.58 suggests that the company is unlikely to be a manipulator.

Linamar Beneish M-Score Related Terms

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Linamar (Linamar) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Linamar Corp (OTCPK:LIMAF) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

LNR:Germany LNR:Canada

Address

287 Speedvale Avenue West, Guelph, ON, CAN, N1H 1C5

Website

https://www.linamar.com

Linamar Corp is a diversified global manufacturing company of highly engineered products. The Company's Industrial segment operates the Skyjack and MacDon brands, It manufactures products for the Aerial Work Platform and Agricultural industries, respectively. The Mobility segment features vertically integrated operations to combine expertise in light metal casting, forging, machining and assembly of components and systems for electric and traditional vehicle applications. In addition, McLaren Engineering and eLIN Product Solutions Group provide design, development, and testing services for the Mobility segment.