Liberty Latin America Stock Beneish M Score

LILA Stock  USD 7.11  0.07  0.99%   
This module uses fundamental data of Liberty Latin to approximate the value of its Beneish M Score. Liberty Latin M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Liberty Latin Piotroski F Score and Liberty Latin Altman Z Score analysis.
  
At present, Liberty Latin's Short Term Debt is projected to increase significantly based on the last few years of reporting. The current year's Net Debt To EBITDA is expected to grow to 5.38, whereas Short and Long Term Debt Total is forecasted to decline to about 6.5 B. At present, Liberty Latin's Book Value Per Share is projected to decrease significantly based on the last few years of reporting. The current year's Free Cash Flow Yield is expected to grow to 0.21, whereas Price To Sales Ratio is forecasted to decline to 0.32.
At this time, it appears that Liberty Latin America is an unlikely manipulator. The earnings manipulation may begin if Liberty Latin's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Liberty Latin executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Liberty Latin's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.97
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

0.84

Focus
Asset Quality

1.24

Focus
Expense Coverage

1.27

Focus
Gross Margin Strengs

0.83

Focus
Accruals Factor

1.27

Focus
Depreciation Resistance

1.01

Focus
Net Sales Growth

0.74

Focus
Financial Leverage Condition

0.85

Focus

Liberty Latin Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Liberty Latin's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables566 M903.3 M
Way Down
Slightly volatile
Total Revenue3.4 B4.5 B
Way Down
Slightly volatile
Total Assets12.3 B13.6 B
Moderately Down
Slightly volatile
Total Current Assets1.7 B2.4 B
Way Down
Slightly volatile
Non Current Assets Total10.7 B11.2 B
Sufficiently Down
Slightly volatile
Property Plant Equipment3.6 B4.9 B
Way Down
Slightly volatile
Depreciation And Amortization722.4 MB
Way Down
Slightly volatile
Selling General Administrative609 M646.3 M
Notably Down
Slightly volatile
Total Current Liabilities1.5 B2.1 B
Way Down
Slightly volatile
Non Current Liabilities Total7.7 B9.2 B
Fairly Down
Slightly volatile
Net Debt5.8 B7.3 B
Significantly Down
Slightly volatile
Short Term Debt699.5 M666.2 M
Sufficiently Up
Slightly volatile
Long Term Debt6.3 B7.6 B
Significantly Down
Slightly volatile
Total Cash From Operating Activities667.8 M897 M
Way Down
Slightly volatile
Short Term Investments96.5 M91.9 M
Sufficiently Up
Slightly volatile
Long Term Investments193.3 M277 M
Way Down
Slightly volatile
Gross Profit Margin0.550.6659
Significantly Down
Slightly volatile

Liberty Latin America Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Liberty Latin's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Liberty Latin in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Liberty Latin's degree of accounting gimmicks and manipulations.

About Liberty Latin Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation And Amortization

722.41 Million

At present, Liberty Latin's Depreciation And Amortization is projected to increase significantly based on the last few years of reporting.

Liberty Latin Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Liberty Latin. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables585.2M636.1M705M802.6M903.3M566.0M
Total Revenue3.9B3.8B4.8B4.8B4.5B3.4B
Total Assets14.9B15.2B15.4B13.6B13.6B12.3B
Total Current Assets2.1B2.0B2.1B2.1B2.4B1.7B
Net Debt7.2B7.5B6.7B7.2B7.3B5.8B
Short Term Debt180.2M225.1M188.3M303.6M666.2M699.5M
Long Term Debt8.2B8.2B7.5B7.7B7.6B6.3B
Operating Income627.2M472.7M681.7M663.8M517.7M343.7M
Investments(635.3M)(2.5B)(1.3B)(1.1B)(830.5M)(872.0M)

Liberty Latin ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Liberty Latin's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Liberty Latin's managers, analysts, and investors.
Environmental
Governance
Social

About Liberty Latin Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Liberty Latin America's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Liberty Latin using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Liberty Latin America based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.

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When determining whether Liberty Latin America is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Liberty Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Liberty Latin America Stock. Highlighted below are key reports to facilitate an investment decision about Liberty Latin America Stock:
Check out Liberty Latin Piotroski F Score and Liberty Latin Altman Z Score analysis.
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Is Diversified Telecommunication Services space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Liberty Latin. If investors know Liberty will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Liberty Latin listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.15)
Earnings Share
(2.99)
Revenue Per Share
22.298
Quarterly Revenue Growth
(0.03)
Return On Assets
0.0239
The market value of Liberty Latin America is measured differently than its book value, which is the value of Liberty that is recorded on the company's balance sheet. Investors also form their own opinion of Liberty Latin's value that differs from its market value or its book value, called intrinsic value, which is Liberty Latin's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Liberty Latin's market value can be influenced by many factors that don't directly affect Liberty Latin's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Liberty Latin's value and its price as these two are different measures arrived at by different means. Investors typically determine if Liberty Latin is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Liberty Latin's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.