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Affymax Inc (OTCPK:AFFY)
Beneish M-Score
34.64 (As of Today)

Warning Sign:

Beneish M-Score 34.64 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Affymax Inc has a M-score of 34.64 signals that the company is a manipulator.

AFFY' s 10-Year Beneish M-Score Range
Min: -13.78   Max: 34.64
Current: 34.64

-13.78
34.64

During the past 13 years, the highest Beneish M-Score of Affymax Inc was 34.64. The lowest was -13.78. And the median was -1.87.


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 Affymax 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+0.528 * 1+0.404 * 1.1209+0.892 * 0.0164+0.115 * 0.7483
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.8982+4.679 * 8.4031-0.327 * 1.282
=34.64

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $0.00 Mil.
Revenue was 0 + 0 + 0 + 0.525 = $0.53 Mil.
Gross Profit was 0 + 0 + 0 + 0.525 = $0.53 Mil.
Total Current Assets was $5.46 Mil.
Total Assets was $6.46 Mil.
Property, Plant and Equipment(Net PPE) was $0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.34 Mil.
Selling, General & Admin. Expense(SGA) was $4.70 Mil.
Total Current Liabilities was $8.80 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -1.392 + -1.431 + -1.692 + 15.372 = $10.86 Mil.
Non Operating Income was 0 + -0.002 + 0 + 0.01 = $0.01 Mil.
Cash Flow from Operations was -0.741 + -1.257 + -4.911 + -36.551 = $-43.46 Mil.
Accounts Receivable was $0.88 Mil.
Revenue was 0.844 + 14.799 + 13.607 + 2.755 = $32.01 Mil.
Gross Profit was 0.844 + 14.799 + 13.607 + 2.755 = $32.01 Mil.
Total Current Assets was $56.80 Mil.
Total Assets was $66.72 Mil.
Property, Plant and Equipment(Net PPE) was $0.65 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.92 Mil.
Selling, General & Admin. Expense(SGA) was $98.78 Mil.
Total Current Liabilities was $70.85 Mil.
Long-Term Debt was $0.00 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)
=(0 / 0.525) / (0.881 / 32.005)
=0 / 0.02752695
=0

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)
=(0 / 32.005) / (0 / 0.525)
=1 / 1
=1

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 - (5.456 + 0) / 6.463) / (1 - (56.797 + 0.647) / 66.718)
=0.15581 / 0.13900297
=1.1209

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
=0.525 / 32.005
=0.0164

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))
=(1.924 / (1.924 + 0.647)) / (0.336 / (0.336 + 0))
=0.74834695 / 1
=0.7483

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)
=(4.696 / 0.525) / (98.776 / 32.005)
=8.9447619 / 3.08626777
=2.8982

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)
=((0 + 8.799) / 6.463) / ((0 + 70.854) / 66.718)
=1.36144205 / 1.06199227
=1.282

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
=(10.857 - 0.008 - -43.46) / 6.463
=8.4031

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.

Affymax Inc has a M-score of 34.64 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.

Affymax Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 110.39790.850.5923011.33870
GMI 111111111
AQI 0.42081.55283.73231.71070.36022.93130.33141.53191.3991
SGI 0.4901158.45953.7811.86871.38680.97930.42411.97760.0145
DEPI 1.13411.53052.14470.76960.56250.78120.85021.05020.4
SGAI 4.15140.0070.57420.75770.77660.9272.32171.382321.1525
LVGI 1.20540.51935.09212.2561.13590.57320.47084.91191.4221
TATA -0.1289-0.46620.0107-0.13380.01940.26580.0889-0.47547.1083
M-score -4.37136.40-0.53-2.58-2.73-1.27-2.92-4.6525.47

Affymax Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 110.50051.08631.33870.0440000
GMI 1111111111
AQI 0.33140.66080.6361.40371.53191.94795.54216.01431.39911.1209
SGI 0.42410.99671.52411.63951.97760.33960.35940.19420.01450.0164
DEPI 0.85020.90631.06221.0821.05020.54550.38410.39030.40.7483
SGAI 2.32171.25841.09341.34341.38237.22944.07743.886221.39682.8982
LVGI 0.47080.87231.67782.03414.91195.83692.77242.26591.42211.282
TATA 0.08890.2935-0.1668-0.2045-0.4754-1.60520.10710.69597.05838.4031
M-score -2.92-1.26-3.63-3.01-4.65-13.78-2.820.1825.1934.64
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