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Merus Labs International Inc (NAS:MSLI)
Beneish M-Score
-3.13 (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 -3.23 suggests that the company is not a manipulator.

MSLI' s 10-Year Beneish M-Score Range
Min: -6.83   Max: 860.26
Current: -3.13

-6.83
860.26

During the past 13 years, the highest Beneish M-Score of Merus Labs International Inc was 860.26. The lowest was -6.83. And the median was -2.06.


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 * 0.371+0.528 * 1.0977+0.404 * 0.7687+0.892 * 1.4533+0.115 * 0.9994
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0451+4.679 * -0.1413-0.327 * 0.5984
=-3.23

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $3.92 Mil.
Revenue was 6.08735213831 + 5.71937842779 + 7.95366795367 + 7.03653846154 = $26.80 Mil.
Gross Profit was 4.98544131028 + 4.82084095064 + 7.04054054054 + 6.23653846154 = $23.08 Mil.
Total Current Assets was $34.98 Mil.
Total Assets was $98.40 Mil.
Property, Plant and Equipment(Net PPE) was $0.01 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.68 Mil.
Selling, General & Admin. Expense(SGA) was $8.70 Mil.
Total Current Liabilities was $11.78 Mil.
Long-Term Debt was $23.63 Mil.
Net Income was -1.32393084622 + -1.7239488117 + -0.0511583011583 + -1.00769230769 = $-4.11 Mil.
Non Operating Income was -0.00454959053685 + -0.0018281535649 + -0.519305019305 + -0.763461538462 = $-1.29 Mil.
Cash Flow from Operations was 2.66787989081 + 2.91316270567 + 3.16023166023 + 2.34807692308 = $11.09 Mil.
Accounts Receivable was $7.27 Mil.
Revenue was 5.36113837095 + 6.32661290323 + 3.88551165147 + 2.86489151874 = $18.44 Mil.
Gross Profit was 5.1040235525 + 6.09576612903 + 3.77912867275 + 2.45562130178 = $17.43 Mil.
Total Current Assets was $14.25 Mil.
Total Assets was $88.23 Mil.
Property, Plant and Equipment(Net PPE) was $0.01 Mil.
Depreciation, Depletion and Amortization(DDA) was $8.98 Mil.
Selling, General & Admin. Expense(SGA) was $5.73 Mil.
Total Current Liabilities was $30.49 Mil.
Long-Term Debt was $22.56 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)
=(3.91901728844 / 26.7969369813) / (7.26790971541 / 18.4381544444)
=0.1462487 / 0.39417772
=0.371

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)
=(4.82084095064 / 18.4381544444) / (4.98544131028 / 26.7969369813)
=0.94556859 / 0.8614179
=1.0977

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 - (34.9799818016 + 0.0090991810737) / 98.4003639672) / (1 - (14.2522080471 + 0.0127576054956) / 88.2325809617)
=0.64442122 / 0.83832542
=0.7687

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
=26.7969369813 / 18.4381544444
=1.4533

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))
=(8.97691113952 / (8.97691113952 + 0.0127576054956)) / (10.6830181253 / (10.6830181253 + 0.0090991810737))
=0.99858086 / 0.99914898
=0.9994

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)
=(8.70374217344 / 26.7969369813) / (5.73036643339 / 18.4381544444)
=0.32480362 / 0.3107885
=1.0451

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)
=((23.6251137398 + 11.7779799818) / 98.4003639672) / ((22.5574092247 + 30.4896957802) / 88.2325809617)
=0.35978621 / 0.60121901
=0.5984

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
=(-4.10673026677 - -1.28914430187 - 11.0893511798) / 98.4003639672
=-0.1413

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 -3.23 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

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 2.59030.92540.61580.62032.52724.09880.0029161.80420.4161
GMI 111111111.10330.992
AQI 0.7811.58460.29821.60010.86180.3481.03451.576813.36590.9412
SGI 0.44491.30890.51532.10120.52790.05851.968308.57932.9211
DEPI 1.59390.71890.90820.82070.87331.32970.90080.55630.3270.9981
SGAI 1.21380.90511.59550.54221.82364.71370.376110.20940.4764
LVGI 0.20.92630.61321.44831.06790.70071.70540.43974.33690.805
TATA 0.00030.017-0.07160.0202-0.4064-0.69230.07150.0927-0.2414-0.1394
M-score -1.31-1.95-3.87-1.60-3.63-4.47-2.32-2.5763.11-1.83

Merus Labs International Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.95080.22120.18140.74240.97740.76951.33290.42280.34270.371
GMI 1.13611.14531.1530.97540.94490.92340.92430.98841.04671.0977
AQI 11.32966.73755.44250.99571.20821.0211.19980.94120.93970.7687
SGI 0.83585.64758.91713.83645.61023.7262.89372.87481.70411.4533
DEPI -0.07020.62640.62431.00290.98570.99230.99520.99811.00030.9994
SGAI 0.67250.38050.23190.54770.46930.35190.55420.47210.72241.0451
LVGI 1.00480.45250.44881.04065.033517.062115.8860.8050.80830.5984
TATA -0.018-0.07330.0184-0.2435-0.2476-0.2974-0.364-0.137-0.1811-0.1413
M-score 1.423.246.06-1.28-0.72-6.83-6.94-1.86-3.19-3.23
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