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Merus Labs International Inc (NAS:MSLI)
Beneish M-Score
-1.70 (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 -1.79 signals that the company is a manipulator.

MSLI' s Beneish M-Score Range Over the Past 10 Years
Min: -6.35   Max: 348.84
Current: -1.7

-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 -2.00.


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 * 1.3829+0.528 * 1.1406+0.404 * 1.068+0.892 * 1.4783+0.115 * 0.9979
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8734+4.679 * -0.0362-0.327 * 1.1159
=-1.79

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $13.65 Mil.
Revenue was 14.897928323 + 11.6137971268 + 12.1694557515 + 7.68701981399 = $46.37 Mil.
Gross Profit was 10.507334039 + 8.34317800627 + 9.13990652797 + 7.0303275374 = $35.02 Mil.
Total Current Assets was $28.29 Mil.
Total Assets was $294.04 Mil.
Property, Plant and Equipment(Net PPE) was $0.08 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.81 Mil.
Selling, General & Admin. Expense(SGA) was $10.30 Mil.
Total Current Liabilities was $35.77 Mil.
Long-Term Debt was $97.92 Mil.
Net Income was -2.59035233631 + -0.667250054693 + -0.437207899894 + -1.29882733522 = $-4.99 Mil.
Non Operating Income was 0.664600030243 + -1.48180558594 + -10.1680988994 + 0 = $-10.99 Mil.
Cash Flow from Operations was 4.40949644639 + 5.01640778823 + 2.21920699533 + 5.00444803882 = $16.65 Mil.
Accounts Receivable was $6.68 Mil.
Revenue was 10.0491361547 + 9.21609434617 + 5.46635182999 + 6.63434903047 = $31.37 Mil.
Gross Profit was 8.90553178 + 8.12348248352 + 4.61992552902 + 5.37211449677 = $27.02 Mil.
Total Current Assets was $22.89 Mil.
Total Assets was $149.27 Mil.
Property, Plant and Equipment(Net PPE) was $0.09 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.01 Mil.
Selling, General & Admin. Expense(SGA) was $7.98 Mil.
Total Current Liabilities was $17.23 Mil.
Long-Term Debt was $43.58 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)
=(13.6511416906 / 46.3682010154) / (6.67776192741 / 31.3659313613)
=0.2944074 / 0.21289857
=1.3829

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)
=(8.34317800627 / 31.3659313613) / (10.507334039 / 46.3682010154)
=0.86147782 / 0.75527507
=1.1406

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 - (28.2882201724 + 0.0831695145925) / 294.042794496) / (1 - (22.8919004597 + 0.0919321604058) / 149.269297828)
=0.90351272 / 0.84602438
=1.068

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
=46.3682010154 / 31.3659313613
=1.4783

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))
=(16.0146394367 / (16.0146394367 + 0.0919321604058)) / (22.8103913339 / (22.8103913339 + 0.0831695145925))
=0.99429226 / 0.99636712
=0.9979

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)
=(10.2977048773 / 46.3682010154) / (7.97580252745 / 31.3659313613)
=0.2220855 / 0.25428234
=0.8734

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)
=((97.9230303947 + 35.7712082262) / 294.042794496) / ((43.5845617372 + 17.2341100016) / 149.269297828)
=0.45467613 / 0.40744261
=1.1159

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
=(-4.99363762611 - -10.9853044551 - 16.6495592688) / 294.042794496
=-0.0362

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 -1.79 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 1.24770.62751.32180.25030.0115776.44890.49060.53860.61421.9273
GMI 1111111.12880.96961.10320.9788
AQI 0.29821.60010.86180.3481.03451.57688.47660.94121.10290.8567
SGI 0.23661.97190.85810.77630.8150.20225.67872.57640.86511.5539
DEPI 1.73870.82070.87330.80320.58911.4080.58770.99841.00890.9948
SGAI 1.69060.54221.32341.2410.84351.20180.37190.52091.37280.6323
LVGI 0.61321.44831.06790.70071.66230.45119.86380.8050.84940.6592
TATA -0.07160.0204-0.1994-0.63730.071-0.4007-0.0228-0.1534-0.1044-0.0269
M-score -3.46-1.71-3.39-6.58-3.45708.771.37-2.11-3.36-1.15

Merus Labs International Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.36410.35240.15330.61531.21181.5391.9851.83750.93851.3829
GMI 1.05011.09931.15511.10381.05270.99880.93460.9761.04741.1406
AQI 0.93970.76870.61061.10291.07961.31281.62370.85670.86331.068
SGI 1.7861.52121.19610.86361.00011.11931.18441.62991.51871.4783
DEPI 1.00020.99940.99961.00891.00671.00491.00450.99470.99660.9979
SGAI 0.72641.04531.18461.37291.0070.78270.73960.63290.8040.8734
LVGI 0.80830.59840.49320.84940.8721.13251.0580.65920.61821.1159
TATA -0.1941-0.1577-0.1221-0.0713-0.0493-0.0629-0.0632-0.0204-0.0427-0.0362
M-score -3.16-3.27-3.60-3.21-2.41-2.05-1.46-1.14-2.15-1.79
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