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Alere Inc (NYSE:ALR)
Beneish M-Score
-2.42 (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 -2.42 suggests that the company is not a manipulator.

ALR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.46   Max: -0.87
Current: -2.42

-3.46
-0.87

During the past 13 years, the highest Beneish M-Score of Alere Inc was -0.87. The lowest was -3.46. And the median was -2.43.


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 * 1.0089+0.528 * 1.0412+0.404 * 1.0327+0.892 * 0.9584+0.115 * 1.0385
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8687+4.679 * 0.0008-0.327 * 0.9185
=-2.42

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $446 Mil.
Revenue was 623.963 + 602.044 + 629.156 + 612.892 = $2,468 Mil.
Gross Profit was 252.936 + 275.049 + 292.574 + 295.215 = $1,116 Mil.
Total Current Assets was $1,457 Mil.
Total Assets was $5,957 Mil.
Property, Plant and Equipment(Net PPE) was $446 Mil.
Depreciation, Depletion and Amortization(DDA) was $309 Mil.
Selling, General & Admin. Expense(SGA) was $805 Mil.
Total Current Liabilities was $725 Mil.
Long-Term Debt was $2,872 Mil.
Net Income was -28.23 + 5.562 + 19.904 + 210.34 = $208 Mil.
Non Operating Income was -9.578 + 4.745 + 3.532 + -2.966 = $-4 Mil.
Cash Flow from Operations was 70.032 + 104.723 + 3.5 + 29.027 = $207 Mil.
Accounts Receivable was $461 Mil.
Revenue was 653.431 + 649.21 + 647.398 + 625.239 = $2,575 Mil.
Gross Profit was 301.565 + 301.622 + 298.693 + 310.358 = $1,212 Mil.
Total Current Assets was $1,831 Mil.
Total Assets was $6,700 Mil.
Property, Plant and Equipment(Net PPE) was $454 Mil.
Depreciation, Depletion and Amortization(DDA) was $336 Mil.
Selling, General & Admin. Expense(SGA) was $967 Mil.
Total Current Liabilities was $771 Mil.
Long-Term Debt was $3,633 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)
=(445.833 / 2468.055) / (461.096 / 2575.278)
=0.18064144 / 0.17904708
=1.0089

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)
=(1212.238 / 2575.278) / (1115.774 / 2468.055)
=0.47072122 / 0.45208636
=1.0412

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 - (1457.29 + 446.039) / 5957.171) / (1 - (1830.584 + 454.223) / 6699.879)
=0.68049784 / 0.65897787
=1.0327

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
=2468.055 / 2575.278
=0.9584

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))
=(336.029 / (336.029 + 454.223)) / (309.264 / (309.264 + 446.039))
=0.42521753 / 0.40945687
=1.0385

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)
=(804.701 / 2468.055) / (966.589 / 2575.278)
=0.32604662 / 0.37533385
=0.8687

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)
=((2872.397 + 724.534) / 5957.171) / ((3632.978 + 771.478) / 6699.879)
=0.60379851 / 0.65739336
=0.9185

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
=(207.576 - -4.267 - 207.282) / 5957.171
=0.0008

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 -2.42 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.05521.10390.84871.11630.99951.0821.09830.85320.95831.0108
GMI 0.8970.85830.86960.98361.04161.00841.00321.03451.06851.0422
AQI 1.0111.11851.0850.94750.97250.97710.99020.94260.96391.0327
SGI 1.34991.47431.8851.21491.1211.10731.00331.08950.98720.9565
DEPI 0.85831.20180.54731.00251.01381.0911.06110.93851.04751.0385
SGAI 0.92921.32541.10930.97111.05660.92110.93381.01670.97780.8704
LVGI 0.6651.08590.92951.17981.35131.17121.03741.05861.02310.9185
TATA -0.0539-0.0695-0.0282-0.0364-0.2075-0.1039-0.0579-0.0436-0.03920.0002
M-score -2.31-2.37-2.04-2.44-3.46-2.83-2.65-2.77-2.69-2.42

Alere Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.78980.89160.94780.7851.03530.94110.8941.0081.00891.0256
GMI 1.04381.02181.04121.05261.0591.06961.04471.03361.04121.0458
AQI 0.94260.97480.97290.93750.96390.98150.90670.95891.03270.9784
SGI 1.17691.09811.02431.04060.91390.94780.98350.96580.95840.9494
DEPI 0.93851.07231.11650.9011.04750.93150.91371.02471.03851.0342
SGAI 1.03981.04311.06111.03680.95610.93560.83280.84780.86870.9244
LVGI 1.05861.02040.9991.04311.02310.9490.97850.95480.91850.9913
TATA -0.0428-0.0515-0.0487-0.0659-0.03910.00660.01810.030.0008-0.0314
M-score -2.75-2.74-2.72-2.98-2.69-2.50-2.50-2.32-2.42-2.61
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