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Alere Inc (NYSE:ALR)
Beneish M-Score
-2.32 (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.

Alere Inc has a M-score of -2.32 suggests that the company is not a manipulator.

ALR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.52   Max: 3.09
Current: -2.32

-3.52
3.09

During the past 13 years, the highest Beneish M-Score of Alere Inc was 3.09. The lowest was -3.52. And the median was -2.44.


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 Alere Inc 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 * 1.0075+0.528 * 1.0352+0.404 * 0.9589+0.892 * 0.9663+0.115 * 1.0248
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8487+4.679 * 0.0288-0.327 * 0.9548
=-2.32

* 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 $452 Mil.
Revenue was 602.044 + 629.156 + 608.153 + 666.857 = $2,506 Mil.
Gross Profit was 275.049 + 292.574 + 291.985 + 308.264 = $1,168 Mil.
Total Current Assets was $1,887 Mil.
Total Assets was $6,574 Mil.
Property, Plant and Equipment(Net PPE) was $445 Mil.
Depreciation, Depletion and Amortization(DDA) was $319 Mil.
Selling, General & Admin. Expense(SGA) was $815 Mil.
Total Current Liabilities was $1,126 Mil.
Long-Term Debt was $2,994 Mil.
Net Income was 5.562 + 19.904 + 209.14 + 111.286 = $346 Mil.
Non Operating Income was 4.745 + 3.532 + -1.869 + -2.895 = $4 Mil.
Cash Flow from Operations was 104.723 + 4.149 + 28.378 + 16.089 = $153 Mil.
Accounts Receivable was $465 Mil.
Revenue was 649.21 + 647.398 + 625.239 + 671.888 = $2,594 Mil.
Gross Profit was 301.622 + 298.693 + 310.358 + 340.49 = $1,251 Mil.
Total Current Assets was $1,762 Mil.
Total Assets was $6,804 Mil.
Property, Plant and Equipment(Net PPE) was $463 Mil.
Depreciation, Depletion and Amortization(DDA) was $346 Mil.
Selling, General & Admin. Expense(SGA) was $994 Mil.
Total Current Liabilities was $770 Mil.
Long-Term Debt was $3,696 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)
=(452.366 / 2506.21) / (464.696 / 2593.735)
=0.18049804 / 0.17916094
=1.0075

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)
=(292.574 / 2593.735) / (275.049 / 2506.21)
=0.48237889 / 0.46599128
=1.0352

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 - (1886.71 + 445.315) / 6574.165) / (1 - (1762.226 + 463.282) / 6804.12)
=0.64527434 / 0.67291759
=0.9589

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
=2506.21 / 2593.735
=0.9663

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))
=(345.763 / (345.763 + 463.282)) / (318.581 / (318.581 + 445.315))
=0.42737178 / 0.41704761
=1.0248

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)
=(814.764 / 2506.21) / (993.593 / 2593.735)
=0.32509806 / 0.38307422
=0.8487

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)
=((2993.928 + 1126.015) / 6574.165) / ((3695.892 + 769.832) / 6804.12)
=0.62668689 / 0.65632646
=0.9548

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
=(345.892 - 3.513 - 153.339) / 6574.165
=0.0288

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.

Alere Inc has a M-score of -2.32 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.

Alere Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.02641.05521.10390.80351.17890.99951.0820.93290.86491.1201
GMI 1.09760.8970.85830.91090.9391.04161.00841.03021.02221.0494
AQI 1.07751.0111.11851.0850.94750.97250.97710.99020.94260.9674
SGI 1.11921.34991.47431.99091.15031.1211.10731.18111.07470.8539
DEPI 0.93750.85831.20180.5451.00681.00461.09180.97070.95011.1402
SGAI 1.06650.92921.32541.06251.01381.05660.92110.99690.98360.9516
LVGI 0.94830.6651.08590.92951.17981.35131.17121.03741.05861.0236
TATA -0.0834-0.0539-0.0695-0.0281-0.0367-0.2075-0.1039-0.0574-0.0448-0.0328
M-score -2.66-2.31-2.37-1.96-2.47-3.46-2.83-2.65-2.78-2.62

Alere Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.97711.04340.92721.04231.10370.91641.04390.94060.89361.0075
GMI 1.04421.03661.01570.99731.0171.02821.05951.0711.04621.0352
AQI 0.98110.96890.94260.97480.97290.93750.96740.98150.90670.9589
SGI 1.13111.0721.00250.93930.87960.89140.91610.94830.98390.9663
DEPI 0.96641.04721.03491.18121.22991.01081.04670.93160.91371.0248
SGAI 0.9830.9860.97130.9730.99010.96660.95490.93630.83370.8487
LVGI 1.06141.05341.05861.02040.9991.04311.02360.9490.97850.9548
TATA -0.0496-0.0468-0.0425-0.0511-0.0484-0.0656-0.04010.00540.01690.0288
M-score -2.62-2.60-2.77-2.73-2.69-2.98-2.68-2.51-2.50-2.32
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