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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 13 years, the highest Beneish M-Score of Allegiant Travel Co LLC was -1.88. The lowest was -3.41. And the median was -2.79.
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 * 0.7388||+||0.528 * 0.9155||+||0.404 * 1.0325||+||0.892 * 1.1414||+||0.115 * 1.3109|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0991||+||4.679 * -0.1479||-||0.327 * 1.342|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $14 Mil.|
Revenue was 278.952 + 265.029 + 290.541 + 302.524 = $1,137 Mil.
Gross Profit was 139.694 + 126.539 + 144.462 + 150.742 = $561 Mil.
Total Current Assets was $434 Mil.
Total Assets was $1,239 Mil.
Property, Plant and Equipment(Net PPE) was $739 Mil.
Depreciation, Depletion and Amortization(DDA) was $83 Mil.
Selling, General & Admin. Expense(SGA) was $238 Mil.
Total Current Liabilities was $363 Mil.
Long-Term Debt was $539 Mil.
Net Income was 4.797 + 14.172 + 33.499 + 34.222 = $87 Mil.
Non Operating Income was 0.044 + 0.101 + 0.075 + -0.003 = $0 Mil.
Cash Flow from Operations was 74.627 + 47.946 + 39.843 + 107.365 = $270 Mil.
|Accounts Receivable was $17 Mil.
Revenue was 238.471 + 228.874 + 255.846 + 272.959 = $996 Mil.
Gross Profit was 102.842 + 102.255 + 118.224 + 126.995 = $450 Mil.
Total Current Assets was $430 Mil.
Total Assets was $930 Mil.
Property, Plant and Equipment(Net PPE) was $452 Mil.
Depreciation, Depletion and Amortization(DDA) was $69 Mil.
Selling, General & Admin. Expense(SGA) was $190 Mil.
Total Current Liabilities was $291 Mil.
Long-Term Debt was $214 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)|
|=||(14.216 / 1137.046)||/||(16.857 / 996.15)|
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)|
|=||(126.539 / 996.15)||/||(139.694 / 1137.046)|
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 - (433.627 + 738.783) / 1239.385)||/||(1 - (429.921 + 451.584) / 930.191)|
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))|
|=||(69.264 / (69.264 + 451.584))||/||(83.409 / (83.409 + 738.783))|
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)|
|=||(237.782 / 1137.046)||/||(189.532 / 996.15)|
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)|
|=||((539.28 + 363.168) / 1239.385)||/||((214.063 + 290.651) / 930.191)|
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|
|=||(86.69 - 0.217||-||269.781)||/||1239.385|
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 -3.41 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