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Alere Inc (NYSE:ALR)
Beneish M-Score
-2.44 (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 -2.44 suggests that the company is not a manipulator.

ALR' s 10-Year Beneish M-Score Range
Min: -3.52   Max: 3.11
Current: -2.44

-3.52
3.11

During the past 13 years, the highest Beneish M-Score of Alere Inc was 3.11. 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 * 1.0818+0.528 * 1.0574+0.404 * 0.9815+0.892 * 0.8245+0.115 * 1.0757
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9104+4.679 * 0.0131-0.327 * 0.949
=-2.44

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $472 Mil.
Revenue was 608.153 + 396.866 + 736.246 + 737.943 = $2,479 Mil.
Gross Profit was 291.985 + 186.137 + 342.859 + 339.918 = $1,161 Mil.
Total Current Assets was $1,439 Mil.
Total Assets was $6,148 Mil.
Property, Plant and Equipment(Net PPE) was $447 Mil.
Depreciation, Depletion and Amortization(DDA) was $312 Mil.
Selling, General & Admin. Expense(SGA) was $897 Mil.
Total Current Liabilities was $661 Mil.
Long-Term Debt was $3,032 Mil.
Net Income was 209.14 + 151.943 + -86.149 + -49.655 = $225 Mil.
Non Operating Income was -1.869 + -2.664 + -8.978 + 2.147 = $-11 Mil.
Cash Flow from Operations was 28.378 + 16.936 + 91.728 + 19.259 = $156 Mil.
Accounts Receivable was $529 Mil.
Revenue was 716.622 + 772.326 + 753.882 + 763.985 = $3,007 Mil.
Gross Profit was 351.239 + 384.349 + 368.646 + 384.487 = $1,489 Mil.
Total Current Assets was $1,521 Mil.
Total Assets was $7,036 Mil.
Property, Plant and Equipment(Net PPE) was $545 Mil.
Depreciation, Depletion and Amortization(DDA) was $433 Mil.
Selling, General & Admin. Expense(SGA) was $1,195 Mil.
Total Current Liabilities was $692 Mil.
Long-Term Debt was $3,761 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)
=(471.663 / 2479.208) / (528.793 / 3006.815)
=0.19024745 / 0.17586483
=1.0818

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)
=(186.137 / 3006.815) / (291.985 / 2479.208)
=0.4951156 / 0.46825397
=1.0574

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 - (1439.248 + 446.705) / 6148.371) / (1 - (1521.103 + 545.051) / 7036.186)
=0.69325973 / 0.70635313
=0.9815

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
=2479.208 / 3006.815
=0.8245

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))
=(432.546 / (432.546 + 545.051)) / (312.115 / (312.115 + 446.705))
=0.4424584 / 0.41131625
=1.0757

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)
=(897.285 / 2479.208) / (1195.347 / 3006.815)
=0.36192405 / 0.39754591
=0.9104

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)
=((3031.594 + 661.243) / 6148.371) / ((3760.886 + 692.181) / 7036.186)
=0.60062039 / 0.6328808
=0.949

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
=(225.279 - -11.364 - 156.301) / 6148.371
=0.0131

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 -2.44 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 1.01851.05521.10390.84871.11630.99951.0820.93290.97380.9948
GMI 1.08870.8970.85830.86960.98361.04161.00841.03021.02221.0494
AQI 1.07751.0111.11851.0850.94750.97250.97710.99020.98470.9229
SGI 1.1281.34991.47431.8851.21491.1211.10731.18111.07470.8539
DEPI 0.93750.85831.20180.54731.00251.00461.09180.97071.03261.0533
SGAI 1.05820.92921.32541.10930.97111.05660.92110.99690.98360.9516
LVGI 0.94830.6651.08590.92951.17981.35131.17121.03741.04071.0311
TATA -0.0834-0.0507-0.0704-0.0282-0.0367-0.2075-0.1039-0.0574-0.0448-0.0326
M-score -2.66-2.30-2.38-2.04-2.44-3.46-2.83-2.65-2.65-2.77

Alere Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.93290.94640.97711.00760.97380.940.96090.92480.99441.0818
GMI 1.03021.04741.04421.03871.02221.00711.02721.0341.05131.0574
AQI 0.99021.02160.98110.96890.98470.97480.97290.97290.92290.9815
SGI 1.18111.16641.13111.11011.07471.04151.01030.98350.85420.8245
DEPI 0.97070.96830.97430.99381.03261.04421.06041.05761.05331.0757
SGAI 0.99690.98050.9830.9940.98360.99841.02210.98910.95730.9104
LVGI 1.03741.04961.06141.05341.04071.02040.9991.03011.03110.949
TATA -0.0574-0.0484-0.0507-0.0475-0.0449-0.0535-0.0513-0.0671-0.03260.0131
M-score -2.65-2.59-2.63-2.61-2.65-2.76-2.74-2.87-2.77-2.44
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