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Alkermes PLC (NAS:ALKS)
Beneish M-Score
-2.86 (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 -2.86 suggests that the company is not a manipulator.

ALKS' s 10-Year Beneish M-Score Range
Min: -4.25   Max: 0.52
Current: -2.86

-4.25
0.52

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 -2.25.


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 * 1.0599+0.528 * 0.9849+0.404 * 0.792+0.892 * 1.0382+0.115 * 0.8193
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.379+4.679 * -0.0719-0.327 * 0.8592
=-2.86

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

This Year (Sep14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $143.7 Mil.
Revenue was 159.992 + 153.424 + 130.212 + 139.802 = $583.4 Mil.
Gross Profit was 112.657 + 110.134 + 91.373 + 94.379 = $408.5 Mil.
Total Current Assets was $812.9 Mil.
Total Assets was $1,837.9 Mil.
Property, Plant and Equipment(Net PPE) was $262.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $96.4 Mil.
Selling, General & Admin. Expense(SGA) was $184.6 Mil.
Total Current Liabilities was $110.1 Mil.
Long-Term Debt was $352.8 Mil.
Net Income was -39.956 + 3.735 + -24.354 + -7.762 = $-68.3 Mil.
Non Operating Income was -0.885 + 28.099 + -1.85 + -0.469 = $24.9 Mil.
Cash Flow from Operations was -7.809 + 8.777 + -3.472 + 41.368 = $38.9 Mil.
Accounts Receivable was $130.6 Mil.
Revenue was 138.631 + 163.422 + 135.909 + 123.978 = $561.9 Mil.
Gross Profit was 92.64 + 115.431 + 96.995 + 82.487 = $387.6 Mil.
Total Current Assets was $422.1 Mil.
Total Assets was $1,477.9 Mil.
Property, Plant and Equipment(Net PPE) was $281.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $79.5 Mil.
Selling, General & Admin. Expense(SGA) was $128.9 Mil.
Total Current Liabilities was $72.6 Mil.
Long-Term Debt was $360.7 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)
=(143.692 / 583.43) / (130.578 / 561.94)
=0.24628833 / 0.23237
=1.0599

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)
=(110.134 / 561.94) / (112.657 / 583.43)
=0.68966972 / 0.70024339
=0.9849

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 - (812.906 + 262.128) / 1837.855) / (1 - (422.085 + 281.253) / 1477.854)
=0.41506049 / 0.52408154
=0.792

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
=583.43 / 561.94
=1.0382

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))
=(79.46 / (79.46 + 281.253)) / (96.393 / (96.393 + 262.128))
=0.22028593 / 0.26886291
=0.8193

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)
=(184.555 / 583.43) / (128.907 / 561.94)
=0.31632758 / 0.22939638
=1.379

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)
=((352.801 + 110.14) / 1837.855) / ((360.69 + 72.598) / 1477.854)
=0.25189202 / 0.29318728
=0.8592

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
=(-68.337 - 24.895 - 38.864) / 1837.855
=-0.0719

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 -2.86 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

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
DSRI 1.91060.83740.96660.97770.84040.38331.88760.86672.00820.8761
GMI 1.50060.65810.90671.05840.97660.95821.21.00321.07070.956
AQI 0.82780.90420.72780.62359.3130.74491.0521.48052.39320.9518
SGI 0.82631.94922.18851.44041.00311.35780.54551.04692.08951.4759
DEPI 0.90381.01971.1420.99370.90841.10710.42852.45940.61150.6702
SGAI 1.18010.58140.62551.14150.89340.73032.37721.03430.79510.6191
LVGI 0.70431.45750.95870.45350.80070.68260.840.60093.48020.8246
TATA -0.0064-0.0104-0.235-0.1293-0.05790.1721-0.0524-0.087-0.0778-0.0703
M-score -1.58-2.13-2.62-2.680.52-1.89-2.44-2.48-1.16-2.46

Alkermes PLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Mar14Jun14Sep14
DSRI 2.00821.68420.55090.65540.87610.82281.0880.97481.14471.0599
GMI 1.07071.07221.1111.04780.9560.98680.96440.9881.01820.9849
AQI 2.39325.10610.93680.94290.95180.95450.89890.82970.72310.792
SGI 2.08952.3292.32491.74671.47591.16991.08531.05430.97661.0382
DEPI 0.61150.46730.16580.43260.67020.79910.89170.8360.77070.8193
SGAI 0.79510.61680.50170.56420.61910.81070.96231.13071.34841.379
LVGI 3.48023.51250.89210.87020.82460.82730.90670.78510.80630.8592
TATA -0.0778-0.0625-0.0965-0.0915-0.0703-0.0912-0.0769-0.0683-0.0571-0.0719
M-score -1.16-0.08-2.10-2.50-2.46-2.88-2.72-2.82-2.76-2.86
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