Legg Mason (Legg Mason) Net-Net Working Capital : $-26.15 (As of Jun. 2020)

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What is Legg Mason Net-Net Working Capital?

In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company's accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. This is a conservative way of estimating the company's value.

Legg Mason's Net-Net Working Capital for the quarter that ended in Jun. 2020 was $-26.15.

The industry rank for Legg Mason's Net-Net Working Capital or its related term are showing as below:

LM's Price-to-Net-Net-Working-Capital is not ranked ^*
in the Asset Management industry.
Industry Median: 6.3
* Ranked among companies with meaningful Price-to-Net-Net-Working-Capital only.

Legg Mason Net-Net Working Capital Historical Data

The historical data trend for Legg Mason's Net-Net Working Capital 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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Legg Mason Net-Net Working Capital Chart

Legg Mason Annual Data

Trend

Mar11

Mar12

Mar13

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Net-Net Working Capital

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-10.86

-28.99

-31.86

-27.90

-27.71

Legg Mason Quarterly Data
	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17	Jun17	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20
Net-Net Working Capital	Get a 7-Day Free Trial															-30.70	-30.17	-29.37	-27.71	-26.15

Competitive Comparison of Legg Mason's Net-Net Working Capital

For the Asset Management subindustry, Legg Mason's Price-to-Net-Net-Working-Capital, along with its competitors' market caps and Price-to-Net-Net-Working-Capital 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.

Legg Mason's Price-to-Net-Net-Working-Capital Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Legg Mason's Price-to-Net-Net-Working-Capital distribution charts can be found below:

* The bar in red indicates where Legg Mason's Price-to-Net-Net-Working-Capital falls into.

Legg Mason Net-Net Working Capital Calculation

Legg Mason's Net-Net Working Capital (NNWC) per share for the fiscal year that ended in Mar. 2020 is calculated as

	Net-Net Working Capital		(A: Mar. 2020 )
=	(Cash, Cash Equivalents, Marketable Securities	+	0.75 * Accounts Receivable	+	0.5 * Total Inventories	-	Total Liabilities
-	Preferred Stock	-	Minority Interest)	/	Shares Outstanding (EOP)
=	(1474.838	+	0.75 * 407.893	+	0.5 * 0	-	4184.439
-	0	-	29.042)	/	87.7817
=	-27.71

Legg Mason's Net-Net Working Capital (NNWC) per share for the quarter that ended in Jun. 2020 is calculated as

	Net-Net Working Capital		(Q: Jun. 2020 )
=	(Cash, Cash Equivalents, Marketable Securities	+	0.75 * Accounts Receivable	+	0.5 * Total Inventories	-	Total Liabilities
-	Preferred Stock	-	Minority Interest)	/	Shares Outstanding (EOP)
=	(1378.726	+	0.75 * 406.411	+	0.5 * 0	-	4022.115
-	0	-	28.974)	/	90.5349
=	-26.15

In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. In "Security Analysis", preferred stock is dubbed "an imperfect creditorship position" that is best placed on the balance sheet alongside funded debt.

This is a conservative way of estimating the company's value.

Legg Mason (NYSE:LM) Net-Net Working Capital Explanation

One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham's strategy produced similar results.

Benjamin Graham looked for companies whose market values were less than two-thirds of their net-net value. They are collected under our Net-Net screener.

Legg Mason Net-Net Working Capital Related Terms

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Legg Mason (Legg Mason) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Legg Mason Inc (NYSE:LM) » Definitions » Net-Net Working Capital

Comparable Companies

Traded in Other Exchanges

N/A

Address

100 International Drive, Baltimore, MD, USA, 21202-1099

Website

https://www.leggmason.com

Legg Mason provides investment management services for institutional and individual investors. The firm had $783.4 billion in managed assets at the end of June, spread among its equity (25% of total AUM), fixed-income (57%), alternatives (9%), and money market (9%) investment platforms. Legg Mason uses a multiaffiliate business model, with its single- largest affiliate, Western Asset Management, accounting for more than 60% of managed assets. Other major affiliates include ClearBridge Investments (more than 15% of AUM), Brandywine (less than 10%), and Clarion Partners (less than 10%). The remaining affiliates--Martin Currie, Royce & Associates, EnTrustPermal, QS Investors, and RARE Infrastructure--each account for 2% or less of Legg Mason's managed assets.