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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.
During the past 14 years, the highest Beneish M-Score of Allegiant Travel Co LLC was -1.59. The lowest was -3.65. And the median was -3.00.
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 LLC 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 * 0.8484||+||0.528 * 0.7939||+||0.404 * 0.5851||+||0.892 * 1.1219||+||0.115 * 0.9405|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9891||+||4.679 * -0.1334||-||0.327 * 1.0225|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $16 Mil.|
Revenue was 299.956 + 322.102 + 329.241 + 278.952 = $1,230 Mil.
Gross Profit was 179.861 + 194.826 + 213.653 + 139.694 = $728 Mil.
Total Current Assets was $403 Mil.
Total Assets was $1,304 Mil.
Property, Plant and Equipment(Net PPE) was $833 Mil.
Depreciation, Depletion and Amortization(DDA) was $97 Mil.
Selling, General & Admin. Expense(SGA) was $240 Mil.
Total Current Liabilities was $358 Mil.
Long-Term Debt was $566 Mil.
Net Income was 44.458 + 54.339 + 64.867 + 4.797 = $168 Mil.
Non Operating Income was 0.067 + 0.055 + -0.004 + 0.044 = $0 Mil.
Cash Flow from Operations was 36.865 + 67.785 + 162.96 + 74.627 = $342 Mil.
|Accounts Receivable was $17 Mil.
Revenue was 265.029 + 290.541 + 302.524 + 238.471 = $1,097 Mil.
Gross Profit was 126.539 + 144.462 + 141.313 + 102.842 = $515 Mil.
Total Current Assets was $440 Mil.
Total Assets was $1,270 Mil.
Property, Plant and Equipment(Net PPE) was $717 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $216 Mil.
Total Current Liabilities was $326 Mil.
Long-Term Debt was $554 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(15.712 / 1230.251)||/||(16.508 / 1096.565)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(194.826 / 1096.565)||/||(179.861 / 1230.251)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (403.477 + 832.822) / 1303.907)||/||(1 - (440.313 + 717.058) / 1269.904)|
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.
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))|
|=||(77.729 / (77.729 + 717.058))||/||(96.651 / (96.651 + 832.822))|
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)|
|=||(240.198 / 1230.251)||/||(216.457 / 1096.565)|
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)|
|=||((566.159 + 358.139) / 1303.907)||/||((554.421 + 325.961) / 1269.904)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(168.461 - 0.162||-||342.237)||/||1303.907|
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 LLC has a M-score of -3.42 suggests that the company will not be a manipulator.
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
Allegiant Travel Co LLC Annual Data
Allegiant Travel Co LLC Quarterly Data