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Alkermes PLC (NAS:ALKS)
Beneish M-Score
-2.75 (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 -2.75 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: -2.75

-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 -2.44.


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 * 1.3218+0.528 * 0.9277+0.404 * 0.9735+0.892 * 1.0308+0.115 * 1.1051
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4587+4.679 * -0.092-0.327 * 1.155
=-2.75

* 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 $185.0 Mil.
Revenue was 195.165 + 156.774 + 163.098 + 152.653 = $667.7 Mil.
Gross Profit was 161.167 + 129.063 + 128.307 + 118.847 = $537.4 Mil.
Total Current Assets was $929.3 Mil.
Total Assets was $1,785.3 Mil.
Property, Plant and Equipment(Net PPE) was $258.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $88.3 Mil.
Selling, General & Admin. Expense(SGA) was $362.8 Mil.
Total Current Liabilities was $236.3 Mil.
Long-Term Debt was $283.1 Mil.
Net Income was -47.193 + -77.423 + -69.382 + -81.015 = $-275.0 Mil.
Non Operating Income was 1.733 + 2.149 + -3.427 + 1.855 = $2.3 Mil.
Cash Flow from Operations was -28.878 + -57.214 + 2.415 + -29.446 = $-113.1 Mil.
Accounts Receivable was $135.8 Mil.
Revenue was 151.37 + 161.214 + 175.161 + 159.992 = $647.7 Mil.
Gross Profit was 120.952 + 121.24 + 128.793 + 112.657 = $483.6 Mil.
Total Current Assets was $1,017.0 Mil.
Total Assets was $1,914.7 Mil.
Property, Plant and Equipment(Net PPE) was $239.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $93.7 Mil.
Selling, General & Admin. Expense(SGA) was $241.3 Mil.
Total Current Liabilities was $134.2 Mil.
Long-Term Debt was $348.1 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)
=(185.008 / 667.69) / (135.782 / 647.737)
=0.27708667 / 0.2096252
=1.3218

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)
=(483.642 / 647.737) / (537.384 / 667.69)
=0.74666416 / 0.80484057
=0.9277

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 - (929.254 + 258.354) / 1785.286) / (1 - (1016.962 + 239.258) / 1914.676)
=0.33477997 / 0.34389944
=0.9735

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
=667.69 / 647.737
=1.0308

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))
=(93.709 / (93.709 + 239.258)) / (88.274 / (88.274 + 258.354))
=0.2814363 / 0.25466494
=1.1051

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)
=(362.809 / 667.69) / (241.281 / 647.737)
=0.54337941 / 0.37249841
=1.4587

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)
=((283.12 + 236.263) / 1785.286) / ((348.056 + 134.218) / 1914.676)
=0.29092426 / 0.25188283
=1.155

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
=(-275.013 - 2.31 - -113.123) / 1785.286
=-0.092

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 -2.75 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 1.1420.99370.90841.10710.42852.45940.61150.67020.75531.0722
SGAI 0.62551.14150.89340.73032.37721.03430.79510.61911.47851.5349
LVGI 0.95870.45350.80070.68260.840.60093.48020.82460.81981.1221
TATA -0.235-0.1293-0.07560.1721-0.0524-0.087-0.0778-0.0703-0.0655-0.1062
M-score -2.62-2.680.44-1.89-2.44-2.48-1.16-2.46-2.75-3.07

Alkermes PLC Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.011.03741.15241.08870.99910.86960.91641.01041.02561.3218
GMI 1.01630.97820.97120.96990.95170.94430.93060.91920.91310.9277
AQI 0.81810.72560.87860.87090.78790.90430.8171.12661.15050.9735
SGI 0.97841.02841.03521.03771.15391.12081.07071.01540.96011.0308
DEPI 0.79060.83610.87640.90890.96380.93610.99811.07221.06551.1051
SGAI 1.29311.33391.33521.27381.20051.21731.37621.53491.59831.4587
LVGI 0.8020.83830.88020.860.98581.02491.02771.12211.17391.155
TATA -0.0508-0.0652-0.0564-0.0655-0.0724-0.0777-0.0909-0.1062-0.1041-0.092
M-score -2.80-2.87-2.67-2.75-2.83-2.98-3.10-3.07-3.12-2.75
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