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Alkermes PLC (NAS:ALKS)
Beneish M-Score
-2.98 (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 -2.98 suggests that the company is not a manipulator.

ALKS' s Beneish M-Score Range Over the Past 10 Years
Min: -4.25   Max: 0.52
Current: -2.98

-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 -2.40.


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 * 0.6797+0.528 * 0.9258+0.404 * 0.817+0.892 * 1.4435+0.115 * 0.9981
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3315+4.679 * -0.0909-0.327 * 1.0277
=-2.98

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $141.0 Mil.
Revenue was 152.653 + 151.37 + 161.214 + 175.161 = $640.4 Mil.
Gross Profit was 118.847 + 120.952 + 121.24 + 128.793 = $489.8 Mil.
Total Current Assets was $1,000.4 Mil.
Total Assets was $1,881.0 Mil.
Property, Plant and Equipment(Net PPE) was $242.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $89.2 Mil.
Selling, General & Admin. Expense(SGA) was $278.9 Mil.
Total Current Liabilities was $200.4 Mil.
Long-Term Debt was $286.5 Mil.
Net Income was -81.015 + -46.109 + -30.657 + 30.514 = $-127.3 Mil.
Non Operating Income was 1.855 + 11.996 + -0.211 + 59.209 = $72.8 Mil.
Cash Flow from Operations was -29.446 + -15.406 + 2.077 + 13.643 = $-29.1 Mil.
Accounts Receivable was $143.7 Mil.
Revenue was 159.992 + 153.424 + 130.212 + 0 = $443.6 Mil.
Gross Profit was 112.657 + 110.134 + 91.373 + 0 = $314.2 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 $96.1 Mil.
Selling, General & Admin. Expense(SGA) was $145.1 Mil.
Total Current Liabilities was $110.1 Mil.
Long-Term Debt was $352.8 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)
=(140.987 / 640.398) / (143.692 / 443.628)
=0.22015528 / 0.32390201
=0.6797

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)
=(120.952 / 443.628) / (118.847 / 640.398)
=0.70816991 / 0.76488684
=0.9258

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 - (1000.423 + 242.675) / 1880.955) / (1 - (812.906 + 262.128) / 1837.855)
=0.33911338 / 0.41506049
=0.817

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
=640.398 / 443.628
=1.4435

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))
=(96.083 / (96.083 + 262.128)) / (89.183 / (89.183 + 242.675))
=0.26823018 / 0.26873844
=0.9981

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)
=(278.89 / 640.398) / (145.101 / 443.628)
=0.4354948 / 0.32707809
=1.3315

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)
=((286.512 + 200.402) / 1880.955) / ((352.801 + 110.14) / 1837.855)
=0.25886531 / 0.25189202
=1.0277

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
=(-127.267 - 72.849 - -29.132) / 1880.955
=-0.0909

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 -2.98 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

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Dec14
DSRI 0.83740.96660.97770.84040.38331.88760.86672.00820.87611.1311
GMI 0.65810.90671.05840.97660.95821.21.00321.07070.9560.9832
AQI 0.90420.72780.62359.3130.74491.0521.48052.39320.95180.7707
SGI 1.94922.18851.44041.00311.35780.54551.04692.08951.47591.0751
DEPI 1.01971.1420.99370.90841.10710.42852.45940.61150.67020.7553
SGAI 0.58140.62551.14150.89340.73032.37721.03430.79510.61911.4785
LVGI 1.45750.95870.45350.80070.68260.840.60093.48020.82460.8227
TATA -0.0104-0.235-0.1293-0.05790.1721-0.0524-0.087-0.0778-0.0703-0.0655
M-score -2.13-2.62-2.680.52-1.89-2.44-2.48-1.16-2.46-2.75

Alkermes PLC Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.82281.0881.39191.41591.55370.7250.63710.6797
GMI 0.98680.96441.03310.9870.97630.93620.93590.9258
AQI 0.95450.89890.81810.72560.87860.78790.90430.817
SGI 1.16991.08530.710.75350.76781.59011.52971.4435
DEPI 0.79910.89170.79060.83610.87640.96380.93610.9981
SGAI 0.81070.96231.28721.36581.381.2061.18891.3315
LVGI 0.82730.90670.8020.83830.88020.98581.02491.0277
TATA -0.0912-0.0769-0.0605-0.0748-0.0661-0.0724-0.0777-0.0909
M-score -2.88-2.72-2.73-2.81-2.59-2.70-2.83-2.98
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