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Merus Labs International Inc (NAS:MSLI)
Beneish M-Score
-1.48 (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 -1.66 signals that the company is a manipulator.

MSLI' s 10-Year Beneish M-Score Range
Min: -6.35   Max: 348.84
Current: -1.48

-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 -2.19.


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 * 1.985+0.528 * 0.9346+0.404 * 1.6237+0.892 * 1.1844+0.115 * 1.0045
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7396+4.679 * -0.1056-0.327 * 1.058
=-1.66

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $5.50 Mil.
Revenue was 7.68701981399 + 10.0491361547 + 9.21609434617 + 5.46635182999 = $32.42 Mil.
Gross Profit was 7.0303275374 + 8.90553178 + 8.12348248352 + 4.61992552902 = $28.68 Mil.
Total Current Assets was $42.00 Mil.
Total Assets was $199.48 Mil.
Property, Plant and Equipment(Net PPE) was $0.09 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.15 Mil.
Selling, General & Admin. Expense(SGA) was $8.22 Mil.
Total Current Liabilities was $16.44 Mil.
Long-Term Debt was $41.35 Mil.
Net Income was -1.29882733522 + 1.71580282137 + -0.187304890739 + -4.13132322223 = $-3.90 Mil.
Non Operating Income was 0 + 0 + 0 + -0.112614658069 = $-0.11 Mil.
Cash Flow from Operations was 4.68014557218 + 6.67855444603 + 2.76795005203 + 3.15502679139 = $17.28 Mil.
Accounts Receivable was $2.34 Mil.
Revenue was 6.63434903047 + 6.02160216022 + 5.88063909774 + 8.833655706 = $27.37 Mil.
Gross Profit was 5.37211449677 + 4.93159315932 + 4.95676691729 + 7.36943907157 = $22.63 Mil.
Total Current Assets was $62.74 Mil.
Total Assets was $122.05 Mil.
Property, Plant and Equipment(Net PPE) was $0.01 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.29 Mil.
Selling, General & Admin. Expense(SGA) was $9.39 Mil.
Total Current Liabilities was $11.29 Mil.
Long-Term Debt was $22.13 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)
=(5.50343712091 / 32.4186021448) / (2.34072022161 / 27.3702459944)
=0.1697617 / 0.08552061
=1.985

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)
=(8.90553178 / 27.3702459944) / (7.0303275374 / 32.4186021448)
=0.8268071 / 0.88465466
=0.9346

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 - (42.0040436717 + 0.0930044480388) / 199.484027497) / (1 - (62.7368421053 + 0.00738688827331) / 122.051708218)
=0.78897033 / 0.48592093
=1.6237

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
=32.4186021448 / 27.3702459944
=1.1844

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))
=(11.2862262037 / (11.2862262037 + 0.00738688827331)) / (18.1468424835 / (18.1468424835 + 0.0930044480388))
=0.99934592 / 0.99490103
=1.0045

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)
=(8.22247881977 / 32.4186021448) / (9.38585103848 / 27.3702459944)
=0.25363459 / 0.34292169
=0.7396

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)
=((41.3465426607 + 16.4391427416) / 199.484027497) / ((22.1283471837 + 11.2890120037) / 122.051708218)
=0.28967575 / 0.27379673
=1.058

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
=(-3.90165262683 - -0.112614658069 - 17.2816768616) / 199.484027497
=-0.1056

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 -1.66 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.

Merus Labs International Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.91090.56570.62751.82133.81820.0047149.79310.47850.6142
GMI 11111111.10330.9921.1032
AQI 1.58460.29821.60010.86180.3481.03451.576813.36590.94121.1029
SGI 1.35080.52181.97190.62280.05091.989408.78582.90.8651
DEPI 0.71890.90820.82070.87331.32970.90080.55630.3270.99811.0089
SGAI 0.90511.59550.54221.82364.71370.376110.20940.47641.3728
LVGI 0.92630.61321.44831.06790.70071.70540.43974.33690.8050.8494
TATA 0.017-0.07160.0202-0.4064-0.69230.07150.0927-0.2414-0.1534-0.1044
M-score -1.93-3.91-1.71-4.20-4.74-2.30-2.5752.24-1.86-3.36

Merus Labs International Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.64850.92220.46280.36410.35240.15330.61531.21181.5391.985
GMI 0.91170.90.99251.05011.09931.15511.10381.05270.99880.9346
AQI 1.0211.19980.94120.93970.76870.61061.10291.07961.31281.6237
SGI 7.29854.27722.9981.7861.52121.19610.86361.00011.11931.1844
DEPI 0.97790.99080.99811.00020.99940.99961.00891.00671.00491.0045
SGAI 0.18650.31870.47630.72641.04531.18461.37291.0070.78270.7396
LVGI 17.062115.8860.8050.80830.59840.49320.84940.8721.13251.058
TATA -0.3019-0.3733-0.1526-0.1941-0.1577-0.1221-0.1054-0.1022-0.1218-0.1056
M-score -3.75-6.10-1.78-3.16-3.27-3.60-3.37-2.66-2.33-1.66
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