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Allergan PLC (NYSE:AGN)
Beneish M-Score
-1.28 (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 -1.28 signals that the company is a manipulator.

AGN' s 10-Year Beneish M-Score Range
Min: -3.55   Max: -0.96
Current: -1.28

-3.55
-0.96

During the past 13 years, the highest Beneish M-Score of Allergan PLC was -0.96. The lowest was -3.55. 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 * 1.6085+0.528 * 0.8566+0.404 * 1.4579+0.892 * 1.7528+0.115 * 0.8254
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3337+4.679 * -0.04-0.327 * 0.6113
=-1.28

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $4,420 Mil.
Revenue was 5755 + 4234.2 + 4056.9 + 3683.1 = $17,729 Mil.
Gross Profit was 3624.9 + 2520.8 + 2225.6 + 1800.1 = $10,171 Mil.
Total Current Assets was $10,487 Mil.
Total Assets was $138,411 Mil.
Property, Plant and Equipment(Net PPE) was $2,859 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,608 Mil.
Selling, General & Admin. Expense(SGA) was $5,362 Mil.
Total Current Liabilities was $7,650 Mil.
Long-Term Debt was $41,319 Mil.
Net Income was -243.1 + -512 + -732.9 + -1042.8 = $-2,531 Mil.
Non Operating Income was -48.7 + -198 + -42.6 + 31.9 = $-257 Mil.
Cash Flow from Operations was 1401.3 + 525 + 811.6 + 522.3 = $3,260 Mil.
Accounts Receivable was $1,568 Mil.
Revenue was 2667.2 + 2655.1 + 2779.3 + 2013 = $10,115 Mil.
Gross Profit was 1370.7 + 1362.1 + 1307.7 + 930.1 = $4,971 Mil.
Total Current Assets was $8,273 Mil.
Total Assets was $25,789 Mil.
Property, Plant and Equipment(Net PPE) was $1,533 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,591 Mil.
Selling, General & Admin. Expense(SGA) was $2,294 Mil.
Total Current Liabilities was $4,183 Mil.
Long-Term Debt was $10,743 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)
=(4420.1 / 17729.2) / (1567.7 / 10114.6)
=0.24931187 / 0.15499377
=1.6085

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)
=(2520.8 / 10114.6) / (3624.9 / 17729.2)
=0.49142823 / 0.57370891
=0.8566

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 - (10486.9 + 2859) / 138411.1) / (1 - (8272.9 + 1532.9) / 25789.4)
=0.90357782 / 0.61977402
=1.4579

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
=17729.2 / 10114.6
=1.7528

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))
=(1591.3 / (1591.3 + 1532.9)) / (4607.6 / (4607.6 + 2859))
=0.50934639 / 0.6170948
=0.8254

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)
=(5362.4 / 17729.2) / (2293.9 / 10114.6)
=0.30246148 / 0.22679098
=1.3337

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)
=((41319.4 + 7649.5) / 138411.1) / ((10742.6 + 4183.4) / 25789.4)
=0.35379316 / 0.57876492
=0.6113

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
=(-2530.8 - -257.4 - 3260.2) / 138411.1
=-0.04

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 -1.28 signals that the company is likely to 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.3230.95840.55051.12431.54620.84541.6170.86660.73471.1218
GMI 1.03631.27970.94840.97540.9510.9740.99821.03210.92890.888
AQI 0.94071.14490.9680.91531.38630.98740.87751.21611.18341.143
SGI 1.00341.20231.26141.01561.10161.27711.28531.29021.46711.5053
DEPI 0.62111.34870.88561.30790.96340.70050.79111.37180.71610.6138
SGAI 0.86350.97211.09440.98991.11541.13810.77681.20261.19171.1657
LVGI 1.041.78070.80260.91761.03460.85751.27311.58450.81740.7276
TATA -0.0515-0.2263-0.0836-0.0537-0.0272-0.0711-0.0553-0.043-0.0873-0.073
M-score -2.46-3.40-3.06-2.59-1.92-2.74-2.04-2.62-2.69-2.24

Allergan PLC Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.02991.24631.10270.73470.78790.78171.0591.12181.70581.6085
GMI 0.98220.96840.95310.92890.89750.89750.90260.8880.88960.8566
AQI 1.15661.13811.14871.18341.1591.02161.42411.1431.23971.4579
SGI 1.20141.2571.33971.46711.50131.46151.54081.50531.55151.7528
DEPI 1.36741.28961.24610.71610.66750.65270.61830.61380.83670.8254
SGAI 1.24171.31061.36421.19171.12251.03021.15151.16571.31131.3337
LVGI 1.62051.56751.58410.81740.78950.91660.58830.72760.70620.6113
TATA -0.0636-0.106-0.1121-0.0873-0.0888-0.0672-0.0585-0.073-0.031-0.04
M-score -2.72-2.69-2.80-2.69-2.62-2.65-2.03-2.24-1.42-1.28
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