Switch to:
Allergan PLC (NYSE:AGN)
Beneish M-Score
-2.47 (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.

Allergan PLC has a M-score of -2.47 suggests that the company is not a manipulator.

AGN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.56   Max: -0.67
Current: -2.47

-3.56
-0.67

During the past 13 years, the highest Beneish M-Score of Allergan PLC was -0.67. The lowest was -3.56. And the median was -2.52.


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 Allergan PLC 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 * 0.3649+0.528 * 0.757+0.404 * 1.0146+0.892 * 1.8208+0.115 * 0.6745
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7749+4.679 * -0.0037-0.327 * 0.9921
=-2.47

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,653 Mil.
Revenue was 3795.9 + 4197.5 + 4088.9 + 5755 = $17,837 Mil.
Gross Profit was 2984.1 + 3087 + 2846 + 3624.9 = $12,542 Mil.
Total Current Assets was $10,092 Mil.
Total Assets was $136,074 Mil.
Property, Plant and Equipment(Net PPE) was $1,602 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,647 Mil.
Selling, General & Admin. Expense(SGA) was $4,999 Mil.
Total Current Liabilities was $10,196 Mil.
Long-Term Debt was $38,552 Mil.
Net Income was 255.7 + -630.9 + 5301.2 + -243.1 = $4,683 Mil.
Non Operating Income was 0.5 + 4.3 + 0.2 + -48.7 = $-44 Mil.
Cash Flow from Operations was 1218.5 + 1555.5 + 1048.2 + 1401.3 = $5,224 Mil.
Accounts Receivable was $3,993 Mil.
Revenue was 2562.6 + 2415.6 + 2150.8 + 2667.2 = $9,796 Mil.
Gross Profit was 1542.5 + 1333.4 + 967.7 + 1370.7 = $5,214 Mil.
Total Current Assets was $11,017 Mil.
Total Assets was $139,461 Mil.
Property, Plant and Equipment(Net PPE) was $2,798 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,331 Mil.
Selling, General & Admin. Expense(SGA) was $3,543 Mil.
Total Current Liabilities was $7,656 Mil.
Long-Term Debt was $42,701 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)
=(2652.8 / 17837.3) / (3992.8 / 9796.2)
=0.14872206 / 0.40758662
=0.3649

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)
=(5214.3 / 9796.2) / (12542 / 17837.3)
=0.53227782 / 0.70313332
=0.757

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 - (10091.5 + 1602.4) / 136073.7) / (1 - (11017.2 + 2797.9) / 139460.7)
=0.91406201 / 0.90093912
=1.0146

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
=17837.3 / 9796.2
=1.8208

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))
=(3331.2 / (3331.2 + 2797.9)) / (6646.9 / (6646.9 + 1602.4))
=0.54350557 / 0.80575322
=0.6745

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)
=(4999.3 / 17837.3) / (3543.1 / 9796.2)
=0.28027224 / 0.36168106
=0.7749

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)
=((38551.8 + 10195.5) / 136073.7) / ((42700.5 + 7655.5) / 139460.7)
=0.35824189 / 0.36107663
=0.9921

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
=(4682.9 - -43.7 - 5223.5) / 136073.7
=-0.0037

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.

Allergan PLC has a M-score of -2.47 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 own currency.

Allergan PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.95840.55051.12431.540.84891.6170.88490.71950.5261.8714
GMI 1.27970.94840.97550.9510.9740.99821.03210.92890.8880.76
AQI 1.14490.9680.91531.37280.98320.891.22171.1781.17191.0758
SGI 1.20231.26141.01561.10161.27711.28531.29021.46711.50531.1538
DEPI 1.34870.88561.30770.96220.70160.79111.37520.71430.43191.1475
SGAI 0.97211.09440.991.11531.13810.77681.20261.19171.16571.1288
LVGI 1.78070.80260.91761.0480.86151.2511.59010.81460.73240.9402
TATA -0.245-0.0836-0.0537-0.0276-0.0729-0.0553-0.043-0.0873-0.0726-0.0028
M-score -3.49-3.06-2.59-1.94-2.75-2.03-2.61-2.70-2.80-1.64

Allergan PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 2.39912.21151.95722.98770.20840.90830.8840.27091.28590.3649
GMI 1.15790.95910.91590.94240.7230.84430.82940.75170.76140.757
AQI 1.1781.1591.02161.42411.17191.23971.45791.02491.07581.0146
SGI 0.440.53480.58370.54623.79972.91373.18953.54821.67911.8208
DEPI 0.71430.66750.65270.61830.43190.83670.82540.74861.14750.6745
SGAI 1.61161.40241.21071.65310.94771.24491.29330.80980.98950.7749
LVGI 0.81460.78950.91660.58830.73240.70620.61130.9330.94020.9921
TATA -0.0856-0.0871-0.0657-0.0577-0.0726-0.031-0.040.0022-0.0027-0.0037
M-score -2.02-2.18-2.36-1.21-1.10-0.95-0.67-0.96-1.68-2.47
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK