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Altera Corp (NAS:ALTR)
Beneish M-Score
-2.54 (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.

Altera Corp has a M-score of -2.54 suggests that the company is not a manipulator.

ALTR' s 10-Year Beneish M-Score Range
Min: -3.45   Max: 1.51
Current: -2.54

-3.45
1.51

During the past 13 years, the highest Beneish M-Score of Altera Corp was 1.51. The lowest was -3.45. And the median was -2.52.


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 Altera Corp 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 * 0.8396+0.528 * 1.0228+0.404 * 1.8329+0.892 * 1.11+0.115 * 0.784
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9198+4.679 * -0.0322-0.327 * 1.6016
=-2.54

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $407 Mil.
Revenue was 499.606 + 491.517 + 461.092 + 454.367 = $1,907 Mil.
Gross Profit was 333.587 + 329.126 + 309.224 + 310.343 = $1,282 Mil.
Total Current Assets was $3,584 Mil.
Total Assets was $5,781 Mil.
Property, Plant and Equipment(Net PPE) was $197 Mil.
Depreciation, Depletion and Amortization(DDA) was $65 Mil.
Selling, General & Admin. Expense(SGA) was $316 Mil.
Total Current Liabilities was $641 Mil.
Long-Term Debt was $1,492 Mil.
Net Income was 118.009 + 127.004 + 116.514 + 98.934 = $460 Mil.
Non Operating Income was -0.72 + 0.043 + 0.048 + 0.868 = $0 Mil.
Cash Flow from Operations was 214.049 + 170.958 + 130.43 + 130.759 = $646 Mil.
Accounts Receivable was $436 Mil.
Revenue was 445.945 + 421.759 + 410.501 + 439.44 = $1,718 Mil.
Gross Profit was 304.42 + 286.655 + 284.418 + 306.073 = $1,182 Mil.
Total Current Assets was $3,874 Mil.
Total Assets was $5,020 Mil.
Property, Plant and Equipment(Net PPE) was $199 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $309 Mil.
Total Current Liabilities was $657 Mil.
Long-Term Debt was $500 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)
=(406.708 / 1906.582) / (436.421 / 1717.645)
=0.21331786 / 0.25408102
=0.8396

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)
=(329.126 / 1717.645) / (333.587 / 1906.582)
=0.68789884 / 0.67255434
=1.0228

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 - (3584.241 + 197.213) / 5781.03) / (1 - (3873.832 + 198.642) / 5019.764)
=0.34588577 / 0.18871206
=1.8329

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
=1906.582 / 1717.645
=1.11

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))
=(47.666 / (47.666 + 198.642)) / (64.639 / (64.639 + 197.213))
=0.19352193 / 0.24685318
=0.784

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)
=(315.897 / 1906.582) / (309.406 / 1717.645)
=0.1656876 / 0.18013385
=0.9198

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)
=((1492.436 + 641.058) / 5781.03) / ((500 + 656.67) / 5019.764)
=0.36905084 / 0.23042318
=1.6016

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
=(460.461 - 0.239 - 646.196) / 5781.03
=-0.0322

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.

Altera Corp has a M-score of -2.54 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.

Altera Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.63021.07841.01262.16970.38772.99051.01950.60471.61361.5356
GMI 0.97661.03041.01091.03350.96191.00420.94131.00791.01161.0173
AQI 0.76233.21441.49350.2740.86311.04290.51261.84285.22441.9622
SGI 1.22871.10561.1440.98291.08210.87431.63491.05630.86370.9717
DEPI 1.51111.12411.06230.92331.14710.94580.99270.91621.03350.7466
SGAI 0.92910.96931.19110.89960.86731.04830.6651.03871.2021.1364
LVGI 0.99461.13020.88051.5271.12780.91590.73720.74570.94371.6338
TATA -0.031-0.0937-0.07180.0104-0.0638-0.053-0.0196-0.0441-0.0066-0.025
M-score -2.80-1.86-2.46-1.81-3.35-0.98-2.07-2.59-0.37-1.99

Altera Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.31391.08051.61361.42671.15041.31421.53561.22820.9130.8396
GMI 1.0251.01271.01161.00441.00471.0141.01731.0231.02121.0228
AQI 10.68295.30595.22444.90821.30631.15511.96222.07081.84171.8329
SGI 0.8440.83320.86370.94630.9660.95350.97170.98531.04881.11
DEPI 1.03471.02451.03350.89670.82590.76740.74660.73390.74110.784
SGAI 1.25081.26131.2021.12731.12031.13261.13641.07370.99210.9198
LVGI 0.92970.87120.94370.980.95630.96781.63381.62191.5751.6016
TATA -0.015-0.0212-0.0066-0.0179-0.0259-0.0248-0.0251-0.0231-0.0372-0.0322
M-score 1.51-0.91-0.37-0.67-2.39-2.32-1.99-2.19-2.56-2.54
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