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AbbVie Inc (NYSE:ABBV)
Beneish M-Score
-2.37 (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 -2.37 suggests that the company is not a manipulator.

ABBV' s Beneish M-Score Range Over the Past 10 Years
Min: -2.93   Max: -2.09
Current: -2.37

-2.93
-2.09

During the past 7 years, the highest Beneish M-Score of AbbVie Inc was -2.09. The lowest was -2.93. And the median was -2.52.


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 * 0.98+0.528 * 1.0318+0.404 * 1.1115+0.892 * 1.1795+0.115 * 0.7906
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6304+4.679 * -0.0304-0.327 * 0.973
=-2.37

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $5,048 Mil.
Revenue was 6452 + 5958 + 6400 + 5944 = $24,754 Mil.
Gross Profit was 5047 + 4589 + 4925 + 4777 = $19,338 Mil.
Total Current Assets was $16,791 Mil.
Total Assets was $67,211 Mil.
Property, Plant and Equipment(Net PPE) was $2,618 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,045 Mil.
Selling, General & Admin. Expense(SGA) was $6,032 Mil.
Total Current Liabilities was $9,272 Mil.
Long-Term Debt was $37,328 Mil.
Net Income was 1610 + 1354 + 1517 + 1239 = $5,720 Mil.
Non Operating Income was -66 + -302 + 10 + -41 = $-399 Mil.
Cash Flow from Operations was 1918 + 2128 + 1963 + 2155 = $8,164 Mil.
Accounts Receivable was $4,367 Mil.
Revenue was 5475 + 5040 + 5452 + 5019 = $20,986 Mil.
Gross Profit was 4559 + 4098 + 4333 + 3925 = $16,915 Mil.
Total Current Assets was $16,877 Mil.
Total Assets was $53,855 Mil.
Property, Plant and Equipment(Net PPE) was $2,517 Mil.
Depreciation, Depletion and Amortization(DDA) was $733 Mil.
Selling, General & Admin. Expense(SGA) was $8,112 Mil.
Total Current Liabilities was $11,258 Mil.
Long-Term Debt was $27,116 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)
=(5048 / 24754) / (4367 / 20986)
=0.20392664 / 0.20809111
=0.98

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)
=(16915 / 20986) / (19338 / 24754)
=0.80601353 / 0.78120708
=1.0318

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 - (16791 + 2618) / 67211) / (1 - (16877 + 2517) / 53855)
=0.71122287 / 0.63988488
=1.1115

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
=24754 / 20986
=1.1795

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))
=(733 / (733 + 2517)) / (1045 / (1045 + 2618))
=0.22553846 / 0.28528529
=0.7906

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)
=(6032 / 24754) / (8112 / 20986)
=0.24367779 / 0.38654341
=0.6304

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)
=((37328 + 9272) / 67211) / ((27116 + 11258) / 53855)
=0.69333889 / 0.71254294
=0.973

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
=(5720 - -399 - 8164) / 67211
=-0.0304

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 -2.37 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.

AbbVie Inc Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.89561.30430.8410.9625
GMI 0.97260.99810.97170.969
AQI 0.67840.89011.05081.9772
SGI 1.05371.02231.06231.1452
DEPI 1.09991.20581.16840.9776
SGAI 0.80331.04941.35860.722
LVGI 2.60950.91481.09970.9488
TATA -0.0393-0.0714-0.0408-0.0412
M-score -3.34-2.52-2.83-2.14

AbbVie Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.04030.98731.01250.8410.88341.05151.02520.96250.93790.98
GMI 0.99340.99830.98980.97170.96310.94520.94480.9690.9981.0318
AQI 0.84890.84880.88821.05081.05722.09672.10671.97721.93531.1115
SGI 1.02631.02791.03891.06231.07431.08971.11681.14521.16341.1795
DEPI 1.19641.19991.25871.16841.1571.14911.0610.97760.87850.7906
SGAI 1.06761.04071.05621.35861.34071.35421.22710.7220.68580.6304
LVGI 0.91410.94530.98611.09971.13230.99560.98780.94880.91820.973
TATA -0.0527-0.0398-0.0518-0.0408-0.0703-0.0321-0.0268-0.0412-0.0421-0.0304
M-score -2.69-2.68-2.70-2.83-2.93-2.13-2.09-2.14-2.14-2.37
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