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Alere Inc (NYSE:ALR)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

ALR' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -0.84
Current: -2.65

-3.46
-0.84

During the past 13 years, the highest Beneish M-Score of Alere Inc was -0.84. The lowest was -3.46. And the median was -2.47.


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 * 0.9738+0.528 * 1.0222+0.404 * 0.9847+0.892 * 1.0747+0.115 * 1.0326
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9836+4.679 * -0.0449-0.327 * 1.0407
=-2.65

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $549 Mil.
Revenue was 772.326 + 753.882 + 763.985 + 739.249 = $3,029 Mil.
Gross Profit was 384.349 + 368.646 + 384.487 + 364.257 = $1,502 Mil.
Total Current Assets was $1,472 Mil.
Total Assets was $7,061 Mil.
Property, Plant and Equipment(Net PPE) was $545 Mil.
Depreciation, Depletion and Amortization(DDA) was $439 Mil.
Selling, General & Admin. Expense(SGA) was $1,201 Mil.
Total Current Liabilities was $673 Mil.
Long-Term Debt was $3,787 Mil.
Net Income was -3.687 + -19.448 + -60.569 + 12.45 = $-71 Mil.
Non Operating Income was 10.878 + -9.668 + 1.063 + -1.493 = $1 Mil.
Cash Flow from Operations was 85.672 + 60.346 + 27.698 + 71.061 = $245 Mil.
Accounts Receivable was $524 Mil.
Revenue was 755.763 + 691.416 + 700.517 + 671.129 = $2,819 Mil.
Gross Profit was 373.868 + 345.775 + 355.608 + 353.071 = $1,428 Mil.
Total Current Assets was $1,407 Mil.
Total Assets was $7,068 Mil.
Property, Plant and Equipment(Net PPE) was $534 Mil.
Depreciation, Depletion and Amortization(DDA) was $457 Mil.
Selling, General & Admin. Expense(SGA) was $1,136 Mil.
Total Current Liabilities was $649 Mil.
Long-Term Debt was $3,642 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)
=(548.729 / 3029.442) / (524.332 / 2818.825)
=0.18113204 / 0.18601084
=0.9738

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)
=(368.646 / 2818.825) / (384.349 / 3029.442)
=0.50670829 / 0.49571472
=1.0222

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 - (1472.414 + 545.164) / 7060.814) / (1 - (1406.737 + 534.469) / 7067.928)
=0.71425702 / 0.72535006
=0.9847

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
=3029.442 / 2818.825
=1.0747

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))
=(456.847 / (456.847 + 534.469)) / (439.43 / (439.43 + 545.164))
=0.46084901 / 0.44630579
=1.0326

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)
=(1201.061 / 3029.442) / (1136.189 / 2818.825)
=0.39646278 / 0.40307185
=0.9836

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)
=((3787.195 + 673.186) / 7060.814) / ((3641.592 + 648.809) / 7067.928)
=0.63170918 / 0.60702387
=1.0407

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
=(-71.254 - 0.78 - 244.777) / 7060.814
=-0.0449

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 -2.65 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.87361.01851.05521.13940.88021.0460.99981.07830.93290.9738
GMI 1.09911.08870.8970.85830.86960.98361.04161.00841.03021.0222
AQI 0.96891.07751.0111.11851.0850.94750.97250.97710.99020.9847
SGI 1.26711.1281.34991.47431.8851.21491.1211.10731.18111.0747
DEPI 0.85080.93750.85831.20180.54731.00251.01381.0910.96251.0326
SGAI 0.98791.05820.92921.32541.10930.97111.05660.92110.99690.9836
LVGI 1.04140.94830.6651.08590.92951.17981.35131.17121.03741.0407
TATA -0.0498-0.0834-0.0507-0.0704-0.0282-0.0364-0.2075-0.1039-0.0563-0.0448
M-score -2.58-2.66-2.30-2.35-2.02-2.50-3.46-2.84-2.65-2.65

Alere Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.04241.07831.05231.04890.99520.93290.94230.96990.99970.9738
GMI 1.02231.00841.00521.00811.01551.03021.04741.04421.03871.0222
AQI 0.91580.97710.94151.0311.03920.99021.02160.98110.96890.9847
SGI 1.08991.10731.11371.15081.1731.18111.16641.13111.11011.0747
DEPI 1.0471.0911.09091.05561.04670.96250.9490.96640.98631.0326
SGAI 1.02660.92110.930.92360.93650.99690.98050.9830.9940.9836
LVGI 1.27351.17121.18381.11161.10231.03741.04961.06141.05341.0407
TATA -0.203-0.1039-0.104-0.1034-0.1001-0.0564-0.0474-0.0495-0.0464-0.0449
M-score -3.42-2.84-2.88-2.78-2.79-2.65-2.59-2.63-2.61-2.65
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