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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 -2.71 suggests that the company is not a manipulator.
During the past 5 years, the highest Beneish M-Score of AbbVie Inc was -2.71. The lowest was -2.71. And the median was -2.71.
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 * 1.0931||+||0.528 * 0.9981||+||0.404 * 0.8901||+||0.892 * 1.0223||+||0.115 * 1.2058|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0494||+||4.679 * -0.0714||-||0.327 * 0.9148|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $4,803 Mil.|
Revenue was 5111 + 4658 + 4692 + 4329 = $18,790 Mil.
Gross Profit was 3829 + 3566 + 3638 + 3176 = $14,209 Mil.
Total Current Assets was $17,848 Mil.
Total Assets was $29,198 Mil.
Property, Plant and Equipment(Net PPE) was $2,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $897 Mil.
Selling, General & Admin. Expense(SGA) was $5,352 Mil.
Total Current Liabilities was $6,879 Mil.
Long-Term Debt was $14,292 Mil.
Net Income was 1128 + 964 + 1068 + 968 = $4,128 Mil.
Non Operating Income was -28 + -16 + -10 + 0 = $-54 Mil.
Cash Flow from Operations was 1245 + 1798 + 2037 + 1187 = $6,267 Mil.
|Accounts Receivable was $4,298 Mil.
Revenue was 5206 + 4508 + 4493 + 4173 = $18,380 Mil.
Gross Profit was 3941 + 3494 + 3420 + 3017 = $13,872 Mil.
Total Current Assets was $15,354 Mil.
Total Assets was $27,008 Mil.
Property, Plant and Equipment(Net PPE) was $2,247 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,150 Mil.
Selling, General & Admin. Expense(SGA) was $4,989 Mil.
Total Current Liabilities was $6,776 Mil.
Long-Term Debt was $14,630 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(4803 / 18790)||/||(4298 / 18380)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(3566 / 18380)||/||(3829 / 18790)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (17848 + 2298) / 29198)||/||(1 - (15354 + 2247) / 27008)|
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.
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))|
|=||(1150 / (1150 + 2247))||/||(897 / (897 + 2298))|
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)|
|=||(5352 / 18790)||/||(4989 / 18380)|
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)|
|=||((14292 + 6879) / 29198)||/||((14630 + 6776) / 27008)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(4128 - -54||-||6267)||/||29198|
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 -2.71 suggests that the company will not be a manipulator.
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
AbbVie Inc Annual Data
AbbVie Inc Quarterly Data