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AbbVie Inc (NYSE:ABBV)
Beneish M-Score
-2.02 (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.

AbbVie Inc has a M-score of -2.02 signals that the company is a manipulator.

ABBV' s Beneish M-Score Range Over the Past 10 Years
Min: -2.93   Max: -2.07
Current: -2.02

-2.93
-2.07

During the past 7 years, the highest Beneish M-Score of AbbVie Inc was -2.07. The lowest was -2.93. And the median was -2.70.


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 AbbVie 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 * 1.0092+0.528 * 0.9459+0.404 * 2.1067+0.892 * 1.1345+0.115 * 1.061
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9352+4.679 * -0.0225-0.327 * 0.9878
=-2.02

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $4,574 Mil.
Revenue was 5944 + 5475 + 5040 + 0 = $16,459 Mil.
Gross Profit was 4777 + 4559 + 4098 + 0 = $13,434 Mil.
Total Current Assets was $17,912 Mil.
Total Assets was $54,832 Mil.
Property, Plant and Equipment(Net PPE) was $2,546 Mil.
Depreciation, Depletion and Amortization(DDA) was $768 Mil.
Selling, General & Admin. Expense(SGA) was $4,650 Mil.
Total Current Liabilities was $8,813 Mil.
Long-Term Debt was $31,359 Mil.
Net Income was 1239 + 1366 + 1022 + 0 = $3,627 Mil.
Non Operating Income was 41 + -10 + -165 + 0 = $-134 Mil.
Cash Flow from Operations was 2155 + 1832 + 1585 + -578 = $4,994 Mil.
Accounts Receivable was $3,995 Mil.
Revenue was 5019 + 4926 + 4563 + 0 = $14,508 Mil.
Gross Profit was 3925 + 3813 + 3463 + 0 = $11,201 Mil.
Total Current Assets was $17,555 Mil.
Total Assets was $28,454 Mil.
Property, Plant and Equipment(Net PPE) was $2,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $793 Mil.
Selling, General & Admin. Expense(SGA) was $4,383 Mil.
Total Current Liabilities was $6,635 Mil.
Long-Term Debt was $14,469 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)
=(4574 / 16459) / (3995 / 14508)
=0.27790267 / 0.27536532
=1.0092

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)
=(4559 / 14508) / (4777 / 16459)
=0.7720568 / 0.81620998
=0.9459

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 - (17912 + 2546) / 54832) / (1 - (17555 + 2432) / 28454)
=0.6268967 / 0.297568
=2.1067

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
=16459 / 14508
=1.1345

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))
=(793 / (793 + 2432)) / (768 / (768 + 2546))
=0.24589147 / 0.23174412
=1.061

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)
=(4650 / 16459) / (4383 / 14508)
=0.2825202 / 0.30210918
=0.9352

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)
=((31359 + 8813) / 54832) / ((14469 + 6635) / 28454)
=0.73263788 / 0.74168834
=0.9878

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
=(3627 - -134 - 4994) / 54832
=-0.0225

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.

AbbVie Inc has a M-score of -2.02 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.

AbbVie Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.06871.09310.841
GMI 0.97260.99810.9717
AQI 0.67840.89011.0508
SGI 1.05371.02231.0623
DEPI 1.09991.20581.1684
SGAI 0.80331.04941.3586
LVGI 2.60950.91481.0997
TATA -0.0393-0.0714-0.0408
M-score -3.18-2.71-2.83

AbbVie Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.07621.0230.97060.99180.84240.88111.04361.0092
GMI 0.99340.98730.99420.98290.98290.97070.94620.9459
AQI 0.89010.84890.84880.88821.05081.05722.09672.1067
SGI 1.03831.04371.04571.06061.06061.07711.0981.1345
DEPI 1.20581.19661.20011.25881.16841.1571.14911.061
SGAI 1.05081.0761.03871.05851.05851.04641.07310.9352
LVGI 0.91480.91410.94530.98611.09971.13230.99560.9878
TATA -0.1128-0.0948-0.0807-0.1026-0.0398-0.0693-0.0316-0.0225
M-score -2.91-2.89-2.87-2.94-2.77-2.87-2.08-2.02
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