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GuruFocus has detected 3 Warning Signs with Allegiant Travel Co $ALGT.
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Allegiant Travel Co (NAS:ALGT)
Beneish M-Score
-1.79 (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.

Allegiant Travel Co has a M-score of -1.79 signals that the company is a manipulator.

ALGT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.58   Max: -1.79
Current: -1.79

-3.58
-1.79

During the past 13 years, the highest Beneish M-Score of Allegiant Travel Co was -1.79. The lowest was -3.58. And the median was -2.71.


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 Allegiant Travel Co 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 * 1.7265+0.528 * 0.9781+0.404 * 1.778+0.892 * 1.0797+0.115 * 1.1375
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1471+4.679 * -0.0769-0.327 * 0.9411
=-1.79

* 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 $41 Mil.
Revenue was 335.883 + 333.481 + 344.851 + 348.615 = $1,363 Mil.
Gross Profit was 204.727 + 205.661 + 222.257 + 237.497 = $870 Mil.
Total Current Assets was $422 Mil.
Total Assets was $1,672 Mil.
Property, Plant and Equipment(Net PPE) was $1,095 Mil.
Depreciation, Depletion and Amortization(DDA) was $105 Mil.
Selling, General & Admin. Expense(SGA) was $394 Mil.
Total Current Liabilities was $393 Mil.
Long-Term Debt was $722 Mil.
Net Income was 41.31 + 45.453 + 60.847 + 71.98 = $220 Mil.
Non Operating Income was 1.084 + 0.061 + 0.072 + 0.009 = $1 Mil.
Cash Flow from Operations was 38.768 + 51.994 + 95.66 + 160.439 = $347 Mil.
Accounts Receivable was $22 Mil.
Revenue was 310.89 + 299.956 + 322.102 + 329.241 = $1,262 Mil.
Gross Profit was 199.868 + 179.861 + 194.826 + 213.653 = $788 Mil.
Total Current Assets was $402 Mil.
Total Assets was $1,358 Mil.
Property, Plant and Equipment(Net PPE) was $886 Mil.
Depreciation, Depletion and Amortization(DDA) was $98 Mil.
Selling, General & Admin. Expense(SGA) was $318 Mil.
Total Current Liabilities was $395 Mil.
Long-Term Debt was $568 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)
=(40.667 / 1362.83) / (21.815 / 1262.189)
=0.02984011 / 0.01728347
=1.7265

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)
=(788.208 / 1262.189) / (870.142 / 1362.83)
=0.624477 / 0.63848169
=0.9781

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 - (422.054 + 1095.314) / 1671.576) / (1 - (401.912 + 885.942) / 1358.331)
=0.09225306 / 0.051885
=1.778

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
=1362.83 / 1262.189
=1.0797

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))
=(98.097 / (98.097 + 885.942)) / (105.216 / (105.216 + 1095.314))
=0.09968812 / 0.08764129
=1.1375

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)
=(394.368 / 1362.83) / (318.412 / 1262.189)
=0.28937432 / 0.25226967
=1.1471

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)
=((722.048 + 392.898) / 1671.576) / ((567.609 + 395.137) / 1358.331)
=0.66700288 / 0.70877128
=0.9411

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
=(219.59 - 1.226 - 346.861) / 1671.576
=-0.0769

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.

Allegiant Travel Co has a M-score of -1.79 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 local exchange's currency.

Allegiant Travel Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.06620.43911.21140.8831.39571.24180.82520.73881.38241.7265
GMI 0.70481.10470.73911.1541.15930.92660.90230.90850.81240.9787
AQI 1.20620.38871.16612.77431.09761.24621.31690.96951.02251.778
SGI 1.48171.39781.1071.18941.1741.16631.09621.14141.11011.0797
DEPI 0.87360.83390.80961.09410.9640.85281.0581.31091.01761.1375
SGAI 6.2370.89371.11310.80631.1630.75541.40881.09110.981.1452
LVGI 0.90110.89570.90150.98121.25640.9811.23821.34020.97470.9411
TATA -0.1121-0.0856-0.1106-0.0644-0.1139-0.1231-0.1129-0.1483-0.1068-0.0769
M-score -3.47-3.20-2.79-1.87-2.49-2.59-3.15-3.44-2.61-1.79

Allegiant Travel Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.88980.73880.63640.60730.84841.38240.96731.31151.64891.7265
GMI 0.93620.92360.83970.81620.79080.79990.86830.89770.9350.9781
AQI 2.56610.96950.94272.94170.58511.02251.45931.63520.94591.778
SGI 1.11841.14141.13461.12721.12191.11011.10121.09121.08751.0797
DEPI 1.33651.31091.33460.94930.94051.01761.07971.08321.20751.1375
SGAI 1.12221.01381.13761.12641.05721.05240.99711.02261.08881.1471
LVGI 1.48471.34021.29271.07171.02250.97470.96740.95390.95350.9411
TATA -0.1122-0.1483-0.1602-0.1634-0.1333-0.1068-0.0964-0.1084-0.1114-0.0769
M-score -2.54-3.42-3.63-2.86-3.44-2.62-2.73-2.40-2.36-1.79
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