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Alere Inc (NYSE:ALR)
Beneish M-Score
-2.69 (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 -2.69 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: -2.69

-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 -2.45.


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 * 0.9833+0.528 * 1.0449+0.404 * 1.0317+0.892 * 0.9605+0.115 * 1.06
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1537+4.679 * -0.0379-0.327 * 0.9864
=-2.69

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $427 Mil.
Revenue was 582.354 + 611.088 + 578.209 + 623.285 = $2,395 Mil.
Gross Profit was 266.128 + 281.861 + 266.257 + 253.029 = $1,067 Mil.
Total Current Assets was $1,511 Mil.
Total Assets was $5,856 Mil.
Property, Plant and Equipment(Net PPE) was $446 Mil.
Depreciation, Depletion and Amortization(DDA) was $290 Mil.
Selling, General & Admin. Expense(SGA) was $903 Mil.
Total Current Liabilities was $707 Mil.
Long-Term Debt was $2,913 Mil.
Net Income was 21.82 + -35.034 + -10.08 + -16.055 = $-39 Mil.
Non Operating Income was -15.088 + -14.112 + -2.514 + -2.667 = $-34 Mil.
Cash Flow from Operations was 52.84 + 98.721 + -4.599 + 70.032 = $217 Mil.
Accounts Receivable was $452 Mil.
Revenue was 603.768 + 623.371 + 612.892 + 653.431 = $2,493 Mil.
Gross Profit was 276.966 + 287.334 + 295.215 + 301.565 = $1,161 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.



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)
=(427.241 / 2394.936) / (452.366 / 2493.462)
=0.17839349 / 0.18142085
=0.9833

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)
=(1161.08 / 2493.462) / (1067.275 / 2394.936)
=0.46564977 / 0.44563821
=1.0449

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 - (1511.206 + 446.313) / 5855.674) / (1 - (1886.71 + 445.315) / 6574.165)
=0.6657056 / 0.64527434
=1.0317

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
=2394.936 / 2493.462
=0.9605

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))
=(318.917 / (318.917 + 445.315)) / (289.8 / (289.8 + 446.313))
=0.41730391 / 0.39368956
=1.06

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)
=(902.84 / 2394.936) / (814.764 / 2493.462)
=0.37697876 / 0.32676014
=1.1537

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)
=((2913.1 + 706.51) / 5855.674) / ((2993.928 + 1126.015) / 6574.165)
=0.61813721 / 0.62668689
=0.9864

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
=(-39.349 - -34.381 - 216.994) / 5855.674
=-0.0379

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 -2.69 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 local exchange's 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 1.0111.11851.0850.94750.97250.97710.99020.94260.96391.0299
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 0.6651.08590.92951.17981.35131.17121.03741.05861.02310.915
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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.94780.7851.03530.94110.89611.00961.01081.02760.94970.9833
GMI 1.04121.05261.0591.06961.04691.03491.04221.04691.04671.0449
AQI 0.97290.93750.96390.98150.90670.95891.02990.97841.05491.0317
SGI 1.02431.04060.91390.94780.98120.96420.95650.94760.95170.9605
DEPI 1.11650.9011.04750.93150.91351.02441.03851.03421.00821.06
SGAI 1.06111.03680.95610.93560.83590.85050.87040.92621.10721.1537
LVGI 0.9991.04311.02310.9490.97850.95480.9150.99130.97690.9864
TATA -0.0487-0.0659-0.03910.00660.01690.02850-0.0317-0.0539-0.0379
M-score -2.72-2.98-2.69-2.50-2.50-2.32-2.42-2.61-2.78-2.69
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