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GuruFocus has detected 5 Warning Signs with AmerisourceBergen Corp $ABC.
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AmerisourceBergen Corp (NYSE:ABC)
Beneish M-Score
-2.54 (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.

AmerisourceBergen Corp has a M-score of -2.54 suggests that the company is not a manipulator.

ABC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12   Max: 2.47
Current: -2.54

-3.12
2.47

During the past 13 years, the highest Beneish M-Score of AmerisourceBergen Corp was 2.47. The lowest was -3.12. And the median was -2.49.


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 AmerisourceBergen 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 * 1.0373+0.528 * 0.9092+0.404 * 0.9316+0.892 * 1.0538+0.115 * 1.1961
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.923+4.679 * -0.0224-0.327 * 0.9861
=-2.54

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $9,584 Mil.
Revenue was 37147.402 + 38169.265 + 37560.603 + 36881.68 = $149,759 Mil.
Gross Profit was 1256.427 + 1037.68 + 1124.535 + 1107.863 = $4,527 Mil.
Total Current Assets was $23,494 Mil.
Total Assets was $34,397 Mil.
Property, Plant and Equipment(Net PPE) was $1,702 Mil.
Depreciation, Depletion and Amortization(DDA) was $416 Mil.
Selling, General & Admin. Expense(SGA) was $2,083 Mil.
Total Current Liabilities was $25,531 Mil.
Long-Term Debt was $3,840 Mil.
Net Income was 411.473 + 247.246 + 143.614 + 349.803 = $1,152 Mil.
Non Operating Income was 5.233 + 0.123 + 1.824 + 2.158 = $9 Mil.
Cash Flow from Operations was 798.739 + -430.355 + 1356.539 + 189.938 = $1,915 Mil.
Accounts Receivable was $8,767 Mil.
Revenue was 35698.357 + 36709.046 + 35470.378 + 34233.556 = $142,111 Mil.
Gross Profit was 1075.331 + 964.877 + 973.574 + 891.464 = $3,905 Mil.
Total Current Assets was $22,070 Mil.
Total Assets was $32,495 Mil.
Property, Plant and Equipment(Net PPE) was $1,095 Mil.
Depreciation, Depletion and Amortization(DDA) was $336 Mil.
Selling, General & Admin. Expense(SGA) was $2,141 Mil.
Total Current Liabilities was $23,771 Mil.
Long-Term Debt was $4,369 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)
=(9583.52 / 149758.95) / (8766.994 / 142111.337)
=0.06399297 / 0.06169102
=1.0373

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)
=(3905.246 / 142111.337) / (4526.505 / 149758.95)
=0.02748019 / 0.03022527
=0.9092

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 - (23493.921 + 1702.06) / 34397.013) / (1 - (22070.068 + 1094.711) / 32495.355)
=0.26749509 / 0.28713568
=0.9316

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
=149758.95 / 142111.337
=1.0538

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))
=(336.387 / (336.387 + 1094.711)) / (416.315 / (416.315 + 1702.06))
=0.23505518 / 0.19652564
=1.1961

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)
=(2082.571 / 149758.95) / (2141.056 / 142111.337)
=0.01390615 / 0.01506605
=0.923

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)
=((3839.598 + 25531.426) / 34397.013) / ((4368.586 + 23770.91) / 32495.355)
=0.85388298 / 0.86595441
=0.9861

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
=(1152.136 - 9.338 - 1914.861) / 34397.013
=-0.0224

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.

AmerisourceBergen Corp has a M-score of -2.54 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 local exchange's currency.

AmerisourceBergen Corp Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 0.93850.94231.10210.89960.98191.00121.42550.76741.14551.0332
GMI 1.03551.19651.00570.9680.96750.92621.18331.14310.96090.8922
AQI 1.0470.97720.90130.93240.95051.20340.83450.90481.29321.1972
SGI 1.07961.06371.02111.08631.00950.99641.12181.35941.13711.0801
DEPI 0.93611.15361.11941.03520.93080.86310.90660.97731.01490.8665
SGAI 0.9350.75360.96910.95510.96531.02681.02120.87181.06151.0348
LVGI 1.1031.03761.02540.99261.01471.03681.04871.03951.0130.9567
TATA -0.0598-0.0344-0.0206-0.0325-0.0311-0.0384-0.0187-0.0521-0.1436-0.0522
M-score -2.74-2.49-2.49-2.68-2.68-2.65-2.07-2.57-2.81-2.61

AmerisourceBergen Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.89090.94271.05451.14551.04571.04611.07911.03321.0851.0373
GMI 1.07390.97260.91730.96090.91330.91650.91160.89220.91820.9092
AQI 0.81811.30541.26661.29321.96171.19421.22941.19720.89460.9316
SGI 1.29051.23251.17461.13711.12181.10861.0961.08011.06631.0538
DEPI 0.96110.95580.88741.01490.83880.7740.82530.86651.08271.1961
SGAI 0.9190.96411.03931.06151.12731.13661.08541.03480.94410.923
LVGI 1.05211.01821.02341.0131.00920.96760.95750.95670.93850.9861
TATA -0.131-0.1335-0.1468-0.1436-0.1087-0.0731-0.0411-0.0522-0.0194-0.0224
M-score -2.98-2.85-2.92-2.81-2.54-2.69-2.49-2.61-2.48-2.54
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