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Merus Labs International Inc (NAS:MSLI)
Beneish M-Score
-2.18 (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.

Merus Labs International Inc has a M-score of -2.46 suggests that the company is not a manipulator.

MSLI' s Beneish M-Score Range Over the Past 10 Years
Min: -6.35   Max: 348.84
Current: -2.18

-6.35
348.84

During the past 13 years, the highest Beneish M-Score of Merus Labs International Inc was 348.84. The lowest was -6.35. And the median was -2.07.


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 Merus Labs International 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 * 0.9385+0.528 * 1.0474+0.404 * 0.8633+0.892 * 1.5187+0.115 * 0.9966
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.804+4.679 * -0.109-0.327 * 0.6182
=-2.46

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $8.83 Mil.
Revenue was 11.6137971268 + 12.1694557515 + 7.68701981399 + 10.0491361547 = $41.52 Mil.
Gross Profit was 8.34317800627 + 9.13990652797 + 7.0303275374 + 8.90553178 = $33.42 Mil.
Total Current Assets was $45.88 Mil.
Total Assets was $188.38 Mil.
Property, Plant and Equipment(Net PPE) was $0.08 Mil.
Depreciation, Depletion and Amortization(DDA) was $20.44 Mil.
Selling, General & Admin. Expense(SGA) was $10.08 Mil.
Total Current Liabilities was $16.43 Mil.
Long-Term Debt was $31.62 Mil.
Net Income was -0.667250054693 + -0.437207899894 + -1.29882733522 + 1.71580282137 = $-0.69 Mil.
Non Operating Income was 0.0999051994458 + 1.15860093472 + 0 + 0 = $1.26 Mil.
Cash Flow from Operations was 5.01640778823 + 2.21920699533 + 4.68014557218 + 6.67855444603 = $18.59 Mil.
Accounts Receivable was $6.19 Mil.
Revenue was 9.21609434617 + 5.46635182999 + 6.63434903047 + 6.02160216022 = $27.34 Mil.
Gross Profit was 8.12348248352 + 4.61992552902 + 5.37211449677 + 4.93159315932 = $23.05 Mil.
Total Current Assets was $20.77 Mil.
Total Assets was $167.95 Mil.
Property, Plant and Equipment(Net PPE) was $0.11 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.25 Mil.
Selling, General & Admin. Expense(SGA) was $8.25 Mil.
Total Current Liabilities was $18.26 Mil.
Long-Term Debt was $51.04 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)
=(8.82520236272 / 41.5194088471) / (6.19146722164 / 27.3383973668)
=0.21255607 / 0.22647513
=0.9385

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)
=(9.13990652797 / 27.3383973668) / (8.34317800627 / 41.5194088471)
=0.84303097 / 0.80489932
=1.0474

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 - (45.8783635966 + 0.0845912637643) / 188.376722818) / (1 - (20.771765522 + 0.10752688172) / 167.94658342)
=0.75600513 / 0.87567897
=0.8633

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
=41.5194088471 / 27.3383973668
=1.5187

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))
=(14.2476531803 / (14.2476531803 + 0.10752688172)) / (20.4351716716 / (20.4351716716 + 0.0845912637643))
=0.99250954 / 0.99587757
=0.9966

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)
=(10.0801902133 / 41.5194088471) / (8.25484697968 / 27.3383973668)
=0.2427826 / 0.30195065
=0.804

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)
=((31.6218187122 + 16.427477576) / 188.376722818) / ((51.0379812695 + 18.262226847) / 167.94658342)
=0.25507024 / 0.41263244
=0.6182

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
=(-0.687482468441 - 1.25850613417 - 18.5943148018) / 188.376722818
=-0.109

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.

Merus Labs International Inc has a M-score of -2.46 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.

Merus Labs International Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 0.56570.62751.82133.81820.0047149.79310.47850.61421.9273
GMI 1111111.10330.9921.10320.9788
AQI 0.29821.60010.86180.3481.03451.576813.36590.94121.10290.8567
SGI 0.52181.97190.62280.05091.989408.78582.90.86511.5539
DEPI 0.90820.82070.87331.32970.90080.55630.3270.99811.00890.9948
SGAI 1.59550.54221.82364.71370.376110.20940.47641.37280.6323
LVGI 0.61321.44831.06790.70071.66230.45114.44930.8050.84940.6592
TATA -0.07160.0202-0.4064-0.69230.0715-0.4748-0.2363-0.1534-0.1049-0.0838
M-score -3.91-1.71-4.20-4.74-2.29-5.2352.23-1.86-3.36-1.42

Merus Labs International Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.46280.36410.35240.15330.61531.21181.5391.9851.83750.9385
GMI 0.99251.05011.09931.15511.10381.05270.99880.93460.9761.0474
AQI 0.94120.93970.76870.61061.10291.07961.31281.62370.85670.8633
SGI 2.9981.7861.52121.19610.86361.00011.11931.18441.62991.5187
DEPI 0.99811.00020.99940.99961.00891.00671.00491.00450.99470.9966
SGAI 0.47630.72641.04531.18461.37291.0070.78270.73960.63290.804
LVGI 0.8050.80830.59840.49320.84940.8721.13251.0580.65920.6182
TATA -0.1526-0.1941-0.1577-0.1221-0.1058-0.1025-0.1221-0.1059-0.0889-0.109
M-score -1.78-3.16-3.27-3.60-3.37-2.66-2.33-1.66-1.46-2.46
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