Lam Research (FRA:LAR) Beneish M-Score : -3.18 (As of May. 02, 2024)

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What is Lam Research 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 -3.18 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

FRA:LAR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28 Med: -2.38 Max: -1.67
Current: -3.18

During the past 13 years, the highest Beneish M-Score of Lam Research was -1.67. The lowest was -3.28. And the median was -2.38.

Lam Research Beneish M-Score Historical Data

The historical data trend for Lam Research'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.

* Premium members only.

Lam Research Beneish M-Score Chart

Lam Research Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Beneish M-Score

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-3.25

-2.09

-1.96

-1.67

-2.86

Lam Research Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.34	-2.86	-3.05	-3.28	-3.18

Competitive Comparison of Lam Research's Beneish M-Score

For the Semiconductor Equipment & Materials subindustry, Lam Research'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.

Lam Research's Beneish M-Score Distribution in the Semiconductors Industry

For the Semiconductors industry and Technology sector, Lam Research's Beneish M-Score distribution charts can be found below:

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

Lam Research 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 Lam Research 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 * 0.9156

0.528 * 0.9538

0.404 * 1.0387

0.892 * 0.7268

0.115 * 1.1109

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.3404

4.679 * -0.071297

0.327 * 0.9936

-3.19

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was €2,027 Mil.
Revenue was 3490.073 + 3446.324 + 3262.692 + 2960.298 = €13,159 Mil.
Gross Profit was 1656.493 + 1611.586 + 1550.456 + 1345.853 = €6,164 Mil.
Total Current Assets was €11,489 Mil.
Total Assets was €16,817 Mil.
Property, Plant and Equipment(Net PPE) was €2,007 Mil.
Depreciation, Depletion and Amortization(DDA) was €334 Mil.
Selling, General, & Admin. Expense(SGA) was €787 Mil.
Total Current Liabilities was €4,076 Mil.
Long-Term Debt & Capital Lease Obligation was €4,120 Mil.
Net Income was 888.56 + 875.062 + 831.492 + 740.742 = €3,336 Mil.
Non Operating Income was -3.47 + 15.469 + -9.982 + -1.873 = €0 Mil.
Cash Flow from Operations was 1274.049 + 1333.171 + 891.24 + 1036.275 = €4,535 Mil.

Total Receivables was €3,047 Mil.
Revenue was 3614.177 + 4982.025 + 5124.862 + 4385.234 = €18,106 Mil.
Gross Profit was 1499.642 + 2243.273 + 2360.203 + 1987.084 = €8,090 Mil.
Total Current Assets was €12,824 Mil.
Total Assets was €17,973 Mil.
Property, Plant and Equipment(Net PPE) was €1,733 Mil.
Depreciation, Depletion and Amortization(DDA) was €326 Mil.
Selling, General, & Admin. Expense(SGA) was €808 Mil.
Total Current Liabilities was €4,148 Mil.
Long-Term Debt & Capital Lease Obligation was €4,667 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)
	=	(2027.41 / 13159.387)	/	(3046.839 / 18106.298)
	=	0.154066	/	0.168275
	=	0.9156

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)
	=	(8090.202 / 18106.298)	/	(6164.388 / 13159.387)
	=	0.446817	/	0.46844
	=	0.9538

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 - (11489.361 + 2007.202) / 16817.278)	/	(1 - (12823.845 + 1732.679) / 17973.299)
	=	0.197459	/	0.190103
	=	1.0387

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
	=	13159.387	/	18106.298
	=	0.7268

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))
	=	(325.937 / (325.937 + 1732.679))	/	(333.604 / (333.604 + 2007.202))
	=	0.158328	/	0.142517
	=	1.1109

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)
	=	(786.906 / 13159.387)	/	(807.776 / 18106.298)
	=	0.059798	/	0.044613
	=	1.3404

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)
	=	((4120.114 + 4075.682) / 16817.278)	/	((4667.123 + 4148.201) / 17973.299)
	=	0.487344	/	0.490468
	=	0.9936

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
	=	(3335.856 - 0.144	-	4534.735)	/	16817.278
	=	-0.071297

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.

Lam Research has a M-score of -3.19 suggests that the company is unlikely to be a manipulator.

Lam Research Beneish M-Score Related Terms

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Lam Research (FRA:LAR) Business Description

Industry

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Traded in Other Exchanges

LRCX:USA LRCX:Mexico 1LRCX:Italy LARd:UK LAR:Germany L1RC34:Brazil

Address

4650 Cushing Parkway, Fremont, CA, USA, 94538

Website

https://www.lamresearch.com

Lam Research is one of the largest semiconductor wafer fabrication equipment, or WFE, manufacturers in the world. It specializes in the market segments of deposition and etch, which entail the buildup of layers on a semiconductor and the subsequent selective removal of patterns from each layer. Lam holds the top market share in etch and holds the clear cut second share in deposition. It is more exposed to memory chipmakers for DRAM and NAND chips. It counts as top customers the largest chipmakers in the world, including TSMC, Samsung, Intel, and Micron.

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