Switch to:
Allergan PLC (NYSE:AGN)
Beneish M-Score
-2.45 (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 -2.45 suggests that the company is not a manipulator.

AGN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.56   Max: -0.96
Current: -2.45

-3.56
-0.96

During the past 13 years, the highest Beneish M-Score of Allergan PLC was -0.96. The lowest was -3.56. And the median was -2.58.


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 * 0.6247+0.528 * 0.8013+0.404 * 1.0249+0.892 * 1.5389+0.115 * 0.7486
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0775+4.679 * 0.0022-0.327 * 0.933
=-2.45

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2,143 Mil.
Revenue was 4088.9 + 5755 + 4234.2 + 4056.9 = $18,135 Mil.
Gross Profit was 2846 + 3624.9 + 2520.8 + 2225.6 = $11,217 Mil.
Total Current Assets was $16,659 Mil.
Total Assets was $142,816 Mil.
Property, Plant and Equipment(Net PPE) was $1,570 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,315 Mil.
Selling, General & Admin. Expense(SGA) was $5,161 Mil.
Total Current Liabilities was $8,133 Mil.
Long-Term Debt was $40,648 Mil.
Net Income was 5301.2 + -243.1 + -512 + -732.9 = $3,813 Mil.
Non Operating Income was 0.2 + -48.7 + -198 + -42.6 = $-289 Mil.
Cash Flow from Operations was 1048.2 + 1401.3 + 525 + 811.6 = $3,786 Mil.
Accounts Receivable was $2,229 Mil.
Revenue was 3683.1 + 2667.2 + 2655.1 + 2779.3 = $11,785 Mil.
Gross Profit was 1800.1 + 1370.7 + 1362.1 + 1307.7 = $5,841 Mil.
Total Current Assets was $6,252 Mil.
Total Assets was $53,467 Mil.
Property, Plant and Equipment(Net PPE) was $1,704 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,333 Mil.
Selling, General & Admin. Expense(SGA) was $3,113 Mil.
Total Current Liabilities was $4,481 Mil.
Long-Term Debt was $15,094 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)
=(2143.2 / 18135) / (2229.3 / 11784.7)
=0.11818031 / 0.18916901
=0.6247

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)
=(3624.9 / 11784.7) / (2846 / 18135)
=0.49560871 / 0.61854425
=0.8013

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 - (16658.7 + 1569.9) / 142816.3) / (1 - (6252.3 + 1704.3) / 53467.4)
=0.87236331 / 0.85118783
=1.0249

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
=18135 / 11784.7
=1.5389

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))
=(2333.1 / (2333.1 + 1704.3)) / (5314.7 / (5314.7 + 1569.9))
=0.5778719 / 0.77196932
=0.7486

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)
=(5161.1 / 18135) / (3112.7 / 11784.7)
=0.28459333 / 0.26413061
=1.0775

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)
=((40648.1 + 8133) / 142816.3) / ((15093.8 + 4481.3) / 53467.4)
=0.34156535 / 0.36611281
=0.933

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
=(3813.2 - -289.1 - 3786.1) / 142816.3
=0.0022

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 -2.45 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 0.95840.55051.12431.54620.84541.6170.86660.73471.12180.8774
GMI 1.27970.94840.97540.9510.9740.99821.03210.92890.8880.76
AQI 1.14490.9680.91531.38630.98740.87751.21611.18341.1431.103
SGI 1.20231.26141.01561.10161.27711.28531.29021.46711.50531.1538
DEPI 1.34870.88561.30790.96340.70050.79111.37180.71610.61380.8073
SGAI 0.97211.09440.98991.11541.13810.77681.20261.19171.16571.1288
LVGI 1.78070.80260.91761.03460.85751.27311.58450.81740.72760.9465
TATA -0.245-0.0836-0.0537-0.0272-0.0711-0.0553-0.043-0.0873-0.073-0.0028
M-score -3.49-3.06-2.59-1.92-2.74-2.04-2.62-2.69-2.24-2.58

Allergan PLC Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.10270.73470.78790.78171.0591.12181.70581.60850.62470.7236
GMI 0.95310.92890.89750.89750.90260.8880.88960.85660.80130.7829
AQI 1.14871.18341.1591.02161.42411.1431.23971.45791.02491.103
SGI 1.33971.46711.50131.46151.54081.50531.55151.75281.53891.3991
DEPI 1.24610.71610.66750.65270.61830.61380.83670.82540.74860.8073
SGAI 1.36421.19171.12251.03021.15151.16571.31131.33371.07751.0521
LVGI 1.58410.81740.78950.91660.58830.72760.70620.61130.9330.9465
TATA -0.1121-0.0873-0.0888-0.0672-0.0585-0.073-0.031-0.040.0022-0.0027
M-score -2.80-2.69-2.62-2.65-2.03-2.24-1.42-1.28-2.45-2.48
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)

GuruFocus Premium Plus Membership

FEEDBACK