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GuruFocus has detected 3 Warning Signs with AmerisourceBergen Corp $ABC.
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AmerisourceBergen Corp (NYSE:ABC)
Beneish M-Score
-2.48 (As of Today)

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

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

AmerisourceBergen Corp has a M-score of -2.48 suggests that the company is not a manipulator.

ABC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12   Max: 2.47
Current: -2.48

-3.12
2.47

During the past 13 years, the highest Beneish M-Score of AmerisourceBergen Corp was 2.47. The lowest was -3.12. And the median was -2.49.


Definition

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

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.085+0.528 * 0.9182+0.404 * 0.8946+0.892 * 1.0663+0.115 * 1.0827
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9466+4.679 * -0.0194-0.327 * 0.9385
=-2.48

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $9,696 Mil.
Revenue was 38169.265 + 37560.603 + 36881.68 + 35698.357 = $148,310 Mil.
Gross Profit was 1037.68 + 1124.535 + 1107.863 + 1075.331 = $4,345 Mil.
Total Current Assets was $23,079 Mil.
Total Assets was $33,919 Mil.
Property, Plant and Equipment(Net PPE) was $1,631 Mil.
Depreciation, Depletion and Amortization(DDA) was $409 Mil.
Selling, General & Admin. Expense(SGA) was $2,085 Mil.
Total Current Liabilities was $25,543 Mil.
Long-Term Debt was $3,872 Mil.
Net Income was 247.246 + 143.614 + 349.803 + 604.135 = $1,345 Mil.
Non Operating Income was 0.123 + 1.824 + 2.158 + 0.756 = $5 Mil.
Cash Flow from Operations was -430.355 + 1356.539 + 191.372 + 878.972 = $1,997 Mil.
Accounts Receivable was $8,381 Mil.
Revenue was 36709.046 + 35470.378 + 34233.556 + 32669.267 = $139,082 Mil.
Gross Profit was 964.877 + 973.574 + 891.464 + 911.976 = $3,742 Mil.
Total Current Assets was $20,362 Mil.
Total Assets was $30,756 Mil.
Property, Plant and Equipment(Net PPE) was $1,060 Mil.
Depreciation, Depletion and Amortization(DDA) was $294 Mil.
Selling, General & Admin. Expense(SGA) was $2,065 Mil.
Total Current Liabilities was $24,024 Mil.
Long-Term Debt was $4,393 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(9696.2 / 148309.905) / (8380.652 / 139082.247)
=0.06537797 / 0.06025681
=1.085

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)
=(3741.891 / 139082.247) / (4345.409 / 148309.905)
=0.02690416 / 0.02929952
=0.9182

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (23078.756 + 1630.741) / 33919.272) / (1 - (20361.675 + 1059.501) / 30755.802)
=0.27152042 / 0.30350781
=0.8946

4. SGI = Sales Growth Index

Ratio of sales 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
=148309.905 / 139082.247
=1.0663

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(293.988 / (293.988 + 1059.501)) / (409.247 / (409.247 + 1630.741))
=0.21720753 / 0.20061245
=1.0827

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(2084.612 / 148309.905) / (2065.157 / 139082.247)
=0.01405578 / 0.01484846
=0.9466

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((3871.584 + 25542.758) / 33919.272) / ((4393.317 + 24024.341) / 30755.802)
=0.86718671 / 0.92397714
=0.9385

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
=(1344.798 - 4.861 - 1996.528) / 33919.272
=-0.0194

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

AmerisourceBergen Corp has a M-score of -2.48 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

AmerisourceBergen Corp Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 0.93850.94351.10070.89960.98191.00541.41950.76741.14551.0332
GMI 1.03551.20750.99650.9680.96750.9261.18351.14310.96090.8922
AQI 1.0470.97720.90130.93240.95051.20340.83450.90481.29321.1972
SGI 1.07961.06231.02241.08631.00950.99221.12651.35941.13711.0801
DEPI 0.93611.15361.11941.03520.93080.86310.90660.97731.01490.8665
SGAI 0.93690.74570.97890.95960.96531.02071.02720.87181.06151.038
LVGI 1.1031.03761.02540.99261.01471.03681.04871.03951.0130.9567
TATA -0.0598-0.0397-0.0206-0.0325-0.0311-0.0384-0.0187-0.054-0.1436-0.0522
M-score -2.74-2.51-2.50-2.68-2.68-2.65-2.07-2.58-2.81-2.61

AmerisourceBergen Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.76740.89090.94271.05451.14551.04571.04611.07911.03321.085
GMI 1.14311.07390.97260.91730.96090.91330.91650.91160.89220.9182
AQI 0.90480.81811.30541.26661.29321.96171.19421.22941.19720.8946
SGI 1.35941.29051.23251.17461.13711.12181.10861.0961.08011.0663
DEPI 0.97730.96110.95580.88741.01490.83880.77980.82530.86651.0827
SGAI 0.87180.9190.96411.03931.06151.12731.13961.08821.03750.9466
LVGI 1.03951.05211.01821.02341.0131.00920.96760.95750.95670.9385
TATA -0.0521-0.131-0.1335-0.1468-0.1436-0.1087-0.0731-0.041-0.0522-0.0194
M-score -2.57-2.98-2.85-2.92-2.81-2.54-2.69-2.49-2.61-2.48
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