Lake Shore Bancorp (Lake Shore Bancorp) Beneish M-Score

: -2.50 (As of Today)

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Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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 -2.5 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LSBK' s Beneish M-Score Range Over the Past 10 Years
Min: -2.58 Med: -2.5 Max: -2.08
Current: -2.5

During the past 13 years, the highest Beneish M-Score of Lake Shore Bancorp was -2.08. The lowest was -2.58. And the median was -2.50.

Lake Shore Bancorp 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 Lake Shore Bancorp 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 * 1.0158

0.528 * 1

0.404 * 0.9558

0.892 * 0.9982

0.115 * 1.0068

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.197

4.679 * -0.00191

0.327 * 0.9062

-2.50

* 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.

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $2.84 Mil.
Revenue was 6.481 + 6.9 + 6.767 + 6.845 = $26.99 Mil.
Gross Profit was 6.481 + 6.9 + 6.767 + 6.845 = $26.99 Mil.
Total Current Assets was $117.01 Mil.
Total Assets was $725.12 Mil.
Property, Plant and Equipment(Net PPE) was $7.87 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.81 Mil.
Selling, General, & Admin. Expense(SGA) was $12.82 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $35.25 Mil.
Net Income was 0.749 + 1.571 + 0.816 + 1.684 = $4.82 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.58 + 1.24 + 1.986 + 1.399 = $6.21 Mil.

Total Receivables was $2.80 Mil.
Revenue was 7.132 + 7.013 + 6.698 + 6.2 = $27.04 Mil.
Gross Profit was 7.132 + 7.013 + 6.698 + 6.2 = $27.04 Mil.
Total Current Assets was $85.48 Mil.
Total Assets was $699.91 Mil.
Property, Plant and Equipment(Net PPE) was $8.29 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.86 Mil.
Selling, General, & Admin. Expense(SGA) was $10.73 Mil.
Total Current Liabilities was $12.60 Mil.
Long-Term Debt & Capital Lease Obligation was $24.95 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)
	=	(2.835 / 26.993)	/	(2.796 / 27.043)
	=	0.105027	/	0.103391
	=	1.0158

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)
	=	(27.043 / 27.043)	/	(26.993 / 26.993)
	=	1	/	1
	=	1

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 - (117.007 + 7.87) / 725.118)	/	(1 - (85.476 + 8.286) / 699.914)
	=	0.827784	/	0.866038
	=	0.9558

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
	=	26.993	/	27.043
	=	0.9982

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))
	=	(0.856 / (0.856 + 8.286))	/	(0.807 / (0.807 + 7.87))
	=	0.093634	/	0.093004
	=	1.0068

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)
	=	(12.815 / 26.993)	/	(10.726 / 27.043)
	=	0.474753	/	0.396628
	=	1.197

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)
	=	((35.25 + 0) / 725.118)	/	((24.95 + 12.596) / 699.914)
	=	0.048613	/	0.053644
	=	0.9062

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
	=	(4.82 - 0	-	6.205)	/	725.118
	=	-0.00191

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.

Lake Shore Bancorp has a M-score of -2.50 suggests that the company is unlikely to be a manipulator.

Lake Shore Bancorp Beneish M-Score Related Terms

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Lake Shore Bancorp (Lake Shore Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Lake Shore Bancorp Inc (NAS:LSBK) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

31 East Fourth Street, Dunkirk, NY, USA, 14048

Website

https://www.lakeshoresavings.com

Lake Shore Bancorp Inc operates as a savings and loan holdings company. The bank's business consists of attracting retail deposits from the general public in the areas surrounding its branch offices and investing those deposits, together with funds generated from operations, primarily in commercial real estate loans, one-to-four family residential mortgage loans, home equity lines of credit and, to a lesser extent, commercial business loans, consumer loans, and investment securities. Its revenues are principally derived from interest earned on loans and investment securities.

Executives

Kim C Liddell	Dir., Pres. and CEO of Bank, other: Dir., Pres. and CEO of Bank	31 EAST FOURTH STREET, DUNKIRK NY 14048
Ronald J Passafaro	director	31 EAST FOURTH STREET, DUNKIRK NY 14048
Kevin M. Sanvidge	director, other: Chairman of the Board	128 EAST FOURTH STREET, DUNKIRK NY 14048
Ann M Segarra	director	31 EAST FOURTH STREET, DUNKIRK NY 14048
Taylor Gilden	officer: Chief Financial Officer	31 EAST FOURTH STREET, DUNKIRK NY 14048
John L Mehltretter	director	31 EAST FOURTH STREET, DUNKIRK NY 14048
Jennifer L Zatkos	officer: Chief Operating Officer	31 EAST FOURTH STREET, DUNKIRK NY 14048
Robert V Cortellucci	officer: Chief Technology Officer	31 EAST FOURTH STREET, DUNKIRK NY 14048
Michelle M Debergalis	director	31 EAST FOURTH STREET, DUNKIRK NY 14048
Catharine M Young	director	31 EAST FOURTH STREET, DUNKIRK NY 14048
Tracy Steve Bennett	director	125 EAST FOURTH STREET, DUNKIRK NY 14048
John P Mcgrath	director	31 EAST FOURTH STREET, DUNKIRK NY 14048
Daniel P Reininga	director, officer: President and CEO	125 EAST FOURTH STREET, DUNKIRK NY 14048
Jeffrey M. Werdein	officer: EVP-Commercial Division	31 EAST FOURTH STREET, DUNKIRK NY 14048
Beverly Sutton	officer: Internal Auditor	31 EAST FOURTH STREET, DUNKIRK NY 14048