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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.
Alkermes PLC has a M-score of -2.72 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Alkermes PLC was 0.52. The lowest was -4.25. And the median was -2.22.
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 Alkermes PLC 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 * 1.088||+||0.528 * 0.9644||+||0.404 * 0.8989||+||0.892 * 1.0853||+||0.115 * 0.8917|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9623||+||4.679 * -0.0769||-||0.327 * 0.9067|
|This Year (Sep13) TTM:||Last Year (Sep12) TTM:|
|Accounts Receivable was $120.4 Mil.|
Revenue was 139.802 + 138.631 + 163.422 + 135.909 = $577.8 Mil.
Gross Profit was 94.379 + 92.64 + 115.431 + 96.995 = $399.4 Mil.
Total Current Assets was $523.6 Mil.
Total Assets was $1,512.4 Mil.
Property, Plant and Equipment(Net PPE) was $274.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $84.3 Mil.
Selling, General & Admin. Expense(SGA) was $136.9 Mil.
Total Current Liabilities was $73.7 Mil.
Long-Term Debt was $359.1 Mil.
Net Income was -7.762 + 7.334 + 2.999 + 16.258 = $18.8 Mil.
Non Operating Income was -0.469 + -0.17 + 0.184 + -0.049 = $-0.5 Mil.
Cash Flow from Operations was 41.368 + 12.747 + 55.304 + 26.199 = $135.6 Mil.
|Accounts Receivable was $102.0 Mil.
Revenue was 123.978 + 152.239 + 130.473 + 125.643 = $532.3 Mil.
Gross Profit was 82.487 + 110.169 + 79.396 + 82.891 = $354.9 Mil.
Total Current Assets was $354.9 Mil.
Total Assets was $1,370.5 Mil.
Property, Plant and Equipment(Net PPE) was $295.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $78.3 Mil.
Selling, General & Admin. Expense(SGA) was $131.1 Mil.
Total Current Liabilities was $68.7 Mil.
Long-Term Debt was $363.8 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)|
|=||(120.448 / 577.764)||/||(101.998 / 532.333)|
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)|
|=||(92.64 / 532.333)||/||(94.379 / 577.764)|
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 - (523.58 + 274.377) / 1512.437)||/||(1 - (354.919 + 295.374) / 1370.547)|
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))|
|=||(78.336 / (78.336 + 295.374))||/||(84.323 / (84.323 + 274.377))|
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)|
|=||(136.933 / 577.764)||/||(131.113 / 532.333)|
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)|
|=||((359.122 + 73.717) / 1512.437)||/||((363.847 + 68.738) / 1370.547)|
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|
|=||(18.829 - -0.504||-||135.618)||/||1512.437|
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.
Alkermes PLC has a M-score of -2.72 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
Alkermes PLC Annual Data
Alkermes PLC Quarterly Data