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Altera Corp. (NAS:ALTR)
Beneish M-Score
-1.99 (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 -1.99 signals that the company is a manipulator.

ALTR' s 10-Year Beneish M-Score Range
Min: -3.26   Max: -0.37
Current: -1.99

-3.26
-0.37

During the past 13 years, the highest Beneish M-Score of Altera Corp. was -0.37. The lowest was -3.26. And the median was -2.43.


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 * 1.5356+0.528 * 1.0173+0.404 * 1.9622+0.892 * 0.9717+0.115 * 0.7466
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1364+4.679 * -0.025-0.327 * 1.6338
=-1.99

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $483 Mil.
Revenue was 454.367 + 445.945 + 421.759 + 410.501 = $1,733 Mil.
Gross Profit was 310.343 + 304.42 + 286.655 + 284.418 = $1,186 Mil.
Total Current Assets was $3,853 Mil.
Total Assets was $6,010 Mil.
Property, Plant and Equipment(Net PPE) was $204 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $320 Mil.
Total Current Liabilities was $707 Mil.
Long-Term Debt was $1,491 Mil.
Net Income was 98.934 + 119.432 + 101.509 + 120.189 = $440 Mil.
Non Operating Income was 0.024 + 0.033 + 0.042 + 0.054 = $0 Mil.
Cash Flow from Operations was 130.759 + 245.406 + 64.565 + 149.478 = $590 Mil.
Accounts Receivable was $324 Mil.
Revenue was 439.44 + 495.01 + 464.831 + 383.754 = $1,783 Mil.
Gross Profit was 306.073 + 343.003 + 323.516 + 268.92 = $1,242 Mil.
Total Current Assets was $3,680 Mil.
Total Assets was $4,658 Mil.
Property, Plant and Equipment(Net PPE) was $206 Mil.
Depreciation, Depletion and Amortization(DDA) was $37 Mil.
Selling, General & Admin. Expense(SGA) was $290 Mil.
Total Current Liabilities was $543 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)
=(483.032 / 1732.572) / (323.708 / 1783.035)
=0.27879476 / 0.18154888
=1.5356

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)
=(304.42 / 1783.035) / (310.343 / 1732.572)
=0.69629144 / 0.68443678
=1.0173

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 - (3852.84 + 204.142) / 6009.847) / (1 - (3680.352 + 206.148) / 4657.828)
=0.32494421 / 0.16559821
=1.9622

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
=1732.572 / 1783.035
=0.9717

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))
=(36.862 / (36.862 + 206.148)) / (52.049 / (52.049 + 204.142))
=0.15168923 / 0.20316483
=0.7466

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)
=(320.068 / 1732.572) / (289.854 / 1783.035)
=0.18473576 / 0.16256215
=1.1364

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)
=((1491.466 + 707.386) / 6009.847) / ((500 + 543.077) / 4657.828)
=0.36587487 / 0.22394064
=1.6338

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
=(440.064 - 0.153 - 590.208) / 6009.847
=-0.025

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 -1.99 signals that the company is likely to 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 -0.031-0.0937-0.07180.0104-0.0477-0.053-0.0196-0.0441-0.0066-0.025
M-score -2.80-1.86-2.46-1.81-3.27-0.98-2.07-2.59-0.37-1.99

Altera Corp. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.91010.60470.95381.31391.08051.61361.42671.15041.31421.5356
GMI 0.99761.00791.02231.0251.01271.01161.00441.00471.0141.0173
AQI 1.73671.84282.137910.68295.30595.22444.90821.30631.15511.9622
SGI 1.22561.05630.91590.8440.83320.86370.94630.9660.95350.9717
DEPI 0.9380.91620.9811.03471.02451.03350.89670.82590.76740.7466
SGAI 0.87631.03871.16971.25081.26131.2021.12731.12031.13261.1364
LVGI 0.76020.74570.79030.92970.87120.94370.980.95630.96781.6338
TATA -0.0219-0.0441-0.0205-0.015-0.0212-0.0066-0.0179-0.0259-0.0248-0.025
M-score -2.08-2.59-2.181.51-0.91-0.37-0.67-2.39-2.32-1.99
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