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Alkermes PLC (NAS:ALKS)
Beneish M-Score
-3.12 (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.

Alkermes PLC has a M-score of -3.12 suggests that the company is not a manipulator.

ALKS' s Beneish M-Score Range Over the Past 10 Years
Min: -4.25   Max: 0.44
Current: -3.12

-4.25
0.44

During the past 13 years, the highest Beneish M-Score of Alkermes PLC was 0.44. The lowest was -4.25. And the median was -2.43.


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 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 * 1.0256+0.528 * 0.9131+0.404 * 1.1505+0.892 * 0.9601+0.115 * 1.0655
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5983+4.679 * -0.1041-0.327 * 1.1739
=-3.12

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $139.8 Mil.
Revenue was 156.774 + 163.098 + 152.653 + 151.37 = $623.9 Mil.
Gross Profit was 129.063 + 128.307 + 118.847 + 120.952 = $497.2 Mil.
Total Current Assets was $838.6 Mil.
Total Assets was $1,794.9 Mil.
Property, Plant and Equipment(Net PPE) was $256.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $85.8 Mil.
Selling, General & Admin. Expense(SGA) was $338.2 Mil.
Total Current Liabilities was $224.1 Mil.
Long-Term Debt was $283.7 Mil.
Net Income was -77.423 + -69.382 + -81.015 + -46.109 = $-273.9 Mil.
Non Operating Income was 2.149 + -3.427 + 1.855 + 11.996 = $12.6 Mil.
Cash Flow from Operations was -57.214 + 2.415 + -29.446 + -15.406 = $-99.7 Mil.
Accounts Receivable was $142.0 Mil.
Revenue was 161.214 + 175.161 + 159.992 + 153.424 = $649.8 Mil.
Gross Profit was 121.24 + 128.793 + 112.657 + 110.134 = $472.8 Mil.
Total Current Assets was $1,003.5 Mil.
Total Assets was $1,924.8 Mil.
Property, Plant and Equipment(Net PPE) was $268.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $98.0 Mil.
Selling, General & Admin. Expense(SGA) was $220.4 Mil.
Total Current Liabilities was $114.2 Mil.
Long-Term Debt was $349.6 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)
=(139.814 / 623.895) / (141.978 / 649.791)
=0.22409861 / 0.21849795
=1.0256

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)
=(128.307 / 649.791) / (129.063 / 623.895)
=0.72765551 / 0.79687928
=0.9131

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 - (838.56 + 256.326) / 1794.887) / (1 - (1003.548 + 268.76) / 1924.774)
=0.38999725 / 0.33898317
=1.1505

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
=623.895 / 649.791
=0.9601

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))
=(98.021 / (98.021 + 268.76)) / (85.812 / (85.812 + 256.326))
=0.26724667 / 0.25081108
=1.0655

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)
=(338.227 / 623.895) / (220.405 / 649.791)
=0.54212167 / 0.33919368
=1.5983

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)
=((283.664 + 224.131) / 1794.887) / ((349.638 + 114.217) / 1924.774)
=0.28291196 / 0.24099193
=1.1739

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
=(-273.929 - 12.573 - -99.651) / 1794.887
=-0.1041

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 -3.12 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.

Alkermes PLC Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Dec14Dec15
DSRI 0.96660.97770.84040.38331.88760.86672.00820.87611.13111.0104
GMI 0.90671.05840.97660.95821.21.00321.07070.9560.98320.9192
AQI 0.72780.62359.3130.74491.0521.48052.39320.95180.76941.1266
SGI 2.18851.44041.00311.35780.54551.04692.08951.47591.07511.0154
DEPI 1.1420.99370.90841.10710.42852.45940.35341.15980.75531.0722
SGAI 0.64021.14150.89340.73032.37721.03430.79510.61911.47851.5349
LVGI 0.95870.45350.80070.68260.840.60093.48020.82460.81981.1221
TATA -0.2346-0.1298-0.07560.1721-0.0524-0.087-0.0778-0.0703-0.0655-0.1062
M-score -2.62-2.680.44-1.89-2.44-2.48-1.19-2.40-2.75-3.07

Alkermes PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.01861.011.03741.15241.08870.99910.86960.91641.01041.0256
GMI 0.97961.01630.97820.97120.96990.95170.94430.93060.91920.9131
AQI 0.8960.81810.72560.87860.87090.78790.90430.8171.12661.1505
SGI 1.0990.97841.02841.03521.03771.15391.12081.07071.01540.9601
DEPI 0.8430.79060.83610.87640.90890.96380.93610.99811.07221.0655
SGAI 1.09641.29311.33391.33521.27381.20051.21731.37621.53491.5983
LVGI 0.93320.8020.83830.88020.860.98581.02491.02771.12211.1739
TATA -0.0803-0.0508-0.0652-0.0564-0.0655-0.0724-0.0777-0.0909-0.1062-0.1041
M-score -2.82-2.80-2.87-2.67-2.75-2.83-2.98-3.10-3.07-3.12
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