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Alere Inc (NYSE:ALR)
Beneish M-Score
-2.79 (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 -2.79 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: -2.79

-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 * 0.887+0.528 * 1.0544+0.404 * 1.0549+0.892 * 1.0189+0.115 * 0.9522
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1451+4.679 * -0.0544-0.327 * 0.9769
=-2.79

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $427 Mil.
Revenue was 611.088 + 578.209 + 623.963 + 602.044 = $2,415 Mil.
Gross Profit was 281.861 + 266.257 + 252.936 + 275.049 = $1,076 Mil.
Total Current Assets was $1,435 Mil.
Total Assets was $5,791 Mil.
Property, Plant and Equipment(Net PPE) was $439 Mil.
Depreciation, Depletion and Amortization(DDA) was $305 Mil.
Selling, General & Admin. Expense(SGA) was $881 Mil.
Total Current Liabilities was $562 Mil.
Long-Term Debt was $2,928 Mil.
Net Income was -35.034 + -10.08 + -28.23 + 5.562 = $-68 Mil.
Non Operating Income was -14.112 + -2.514 + -9.578 + 4.745 = $-21 Mil.
Cash Flow from Operations was 98.721 + -4.599 + 70.032 + 104.723 = $269 Mil.
Accounts Receivable was $473 Mil.
Revenue was 629.156 + 608.153 + 396.866 + 736.246 = $2,370 Mil.
Gross Profit was 292.574 + 291.985 + 186.137 + 342.859 = $1,114 Mil.
Total Current Assets was $1,938 Mil.
Total Assets was $6,651 Mil.
Property, Plant and Equipment(Net PPE) was $448 Mil.
Depreciation, Depletion and Amortization(DDA) was $287 Mil.
Selling, General & Admin. Expense(SGA) was $755 Mil.
Total Current Liabilities was $1,138 Mil.
Long-Term Debt was $2,965 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)
=(427.222 / 2415.304) / (472.686 / 2370.421)
=0.17688125 / 0.19941015
=0.887

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)
=(1113.555 / 2370.421) / (1076.103 / 2415.304)
=0.46977098 / 0.44553522
=1.0544

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 - (1435.307 + 438.787) / 5790.894) / (1 - (1938.283 + 448.302) / 6651.394)
=0.67637225 / 0.64119025
=1.0549

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
=2415.304 / 2370.421
=1.0189

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))
=(286.868 / (286.868 + 448.302)) / (304.658 / (304.658 + 438.787))
=0.39020635 / 0.40979225
=0.9522

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)
=(880.573 / 2415.304) / (754.673 / 2370.421)
=0.36458061 / 0.31837087
=1.1451

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)
=((2927.761 + 561.942) / 5790.894) / ((2964.949 + 1138.012) / 6651.394)
=0.60261904 / 0.61685731
=0.9769

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
=(-67.782 - -21.459 - 268.877) / 5790.894
=-0.0544

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 -2.79 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 1.05521.10390.84871.11630.99951.0820.93290.97380.99481.0044
GMI 0.8970.85830.86960.98361.04161.00841.03021.02221.04941.0459
AQI 1.0111.11851.0850.94750.97250.97710.99020.98470.92291.0323
SGI 1.34991.47431.8851.21491.1211.10731.18111.07470.85390.9523
DEPI 0.85831.20180.54731.00251.00461.09180.97071.03261.05331.0348
SGAI 0.92921.32541.10930.97111.05660.92110.99690.98360.95160.8659
LVGI 0.6651.08590.92951.17981.35131.17121.03741.04071.03110.927
TATA -0.0539-0.0695-0.0282-0.0367-0.2075-0.1039-0.0574-0.0448-0.03260.0002
M-score -2.31-2.37-2.04-2.44-3.46-2.83-2.65-2.65-2.77-2.43

Alere Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.940.96090.92480.99441.08181.10561.15841.00480.99210.887
GMI 1.00711.02721.0341.05131.05741.03131.02361.0441.04841.0544
AQI 0.97480.97290.97290.92290.98150.90670.9241.03230.97841.0549
SGI 1.04151.01030.98350.85420.82450.79520.75470.95190.98151.0189
DEPI 1.04421.06041.05761.05331.07571.12131.12691.03481.0070.9522
SGAI 0.99841.02210.98910.95730.91040.78660.78760.86070.92851.1451
LVGI 1.02040.9991.03011.03110.9490.97850.96680.9270.99130.9769
TATA -0.0535-0.0513-0.0671-0.03260.01310.02460.03480.0004-0.0311-0.0544
M-score -2.76-2.74-2.87-2.77-2.44-2.41-2.35-2.43-2.62-2.79
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