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Altera Corp (NAS:ALTR)
Beneish M-Score
-2.19 (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 -2.56 suggests that the company is not a manipulator.

ALTR' s 10-Year Beneish M-Score Range
Min: -3.45   Max: 1.51
Current: -2.19

-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 -2.49.


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 * 0.913+0.528 * 1.0212+0.404 * 1.8417+0.892 * 1.0488+0.115 * 0.7411
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9921+4.679 * -0.0371-0.327 * 1.575
=-2.56

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $453 Mil.
Revenue was 491.517 + 461.092 + 454.367 + 445.945 = $1,853 Mil.
Gross Profit was 329.126 + 309.224 + 310.343 + 304.42 = $1,253 Mil.
Total Current Assets was $3,610 Mil.
Total Assets was $5,816 Mil.
Property, Plant and Equipment(Net PPE) was $196 Mil.
Depreciation, Depletion and Amortization(DDA) was $62 Mil.
Selling, General & Admin. Expense(SGA) was $317 Mil.
Total Current Liabilities was $630 Mil.
Long-Term Debt was $1,492 Mil.
Net Income was 127.004 + 116.514 + 98.934 + 119.432 = $462 Mil.
Non Operating Income was 0.043 + 0.048 + 0.024 + 0.033 = $0 Mil.
Cash Flow from Operations was 170.958 + 130.43 + 130.759 + 245.406 = $678 Mil.
Accounts Receivable was $473 Mil.
Revenue was 421.759 + 410.501 + 439.44 + 495.01 = $1,767 Mil.
Gross Profit was 286.655 + 284.418 + 306.073 + 343.003 = $1,220 Mil.
Total Current Assets was $3,763 Mil.
Total Assets was $4,879 Mil.
Property, Plant and Equipment(Net PPE) was $201 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $305 Mil.
Total Current Liabilities was $631 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)
=(452.559 / 1852.921) / (472.597 / 1766.71)
=0.24424085 / 0.26750117
=0.913

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)
=(309.224 / 1766.71) / (329.126 / 1852.921)
=0.69063344 / 0.67629057
=1.0212

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 - (3609.708 + 195.582) / 5815.864) / (1 - (3762.676 + 200.823) / 4879.403)
=0.34570513 / 0.18770821
=1.8417

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
=1852.921 / 1766.71
=1.0488

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))
=(43.69 / (43.69 + 200.823)) / (62.132 / (62.132 + 195.582))
=0.17868171 / 0.24108896
=0.7411

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)
=(317.08 / 1852.921) / (304.742 / 1766.71)
=0.1711244 / 0.17249124
=0.9921

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)
=((1492.113 + 630.303) / 5815.864) / ((500 + 630.601) / 4879.403)
=0.36493563 / 0.23170888
=1.575

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
=(461.884 - 0.148 - 677.553) / 5815.864
=-0.0371

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 -2.56 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.95381.31391.08051.61361.42671.15041.31421.53561.22820.913
GMI 1.02231.0251.01271.01161.00441.00471.0141.01731.0231.0212
AQI 2.137910.68295.30595.22444.90821.30631.15511.96222.07081.8417
SGI 0.91590.8440.83320.86370.94630.9660.95350.97170.98531.0488
DEPI 0.9811.03471.02451.03350.89670.82590.76740.74660.73390.7411
SGAI 1.16971.25081.26131.2021.12731.12031.13261.13641.07370.9921
LVGI 0.79030.92970.87120.94370.980.95630.96781.63381.62191.575
TATA -0.0205-0.015-0.0212-0.0066-0.0179-0.0259-0.0248-0.025-0.023-0.0371
M-score -2.181.51-0.91-0.37-0.67-2.39-2.32-1.99-2.19-2.56
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