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Alkermes PLC (NAS:ALKS)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

ALKS' s 10-Year Beneish M-Score Range
Min: -4.25   Max: 0.52
Current: -2.76

-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 -2.24.


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 * 1.1447+0.528 * 1.0182+0.404 * 0.7231+0.892 * 0.9766+0.115 * 0.7707
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3484+4.679 * -0.0571-0.327 * 0.8063
=-2.76

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

This Year (Jun14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $139.3 Mil.
Revenue was 153.424 + 130.212 + 139.802 + 138.631 = $562.1 Mil.
Gross Profit was 110.134 + 91.373 + 94.379 + 92.64 = $388.5 Mil.
Total Current Assets was $886.9 Mil.
Total Assets was $1,857.6 Mil.
Property, Plant and Equipment(Net PPE) was $264.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $94.9 Mil.
Selling, General & Admin. Expense(SGA) was $165.6 Mil.
Total Current Liabilities was $102.2 Mil.
Long-Term Debt was $354.4 Mil.
Net Income was 3.735 + -24.354 + -7.762 + 7.334 = $-21.0 Mil.
Non Operating Income was 28.099 + -1.85 + -0.469 + -0.17 = $25.6 Mil.
Cash Flow from Operations was 8.777 + -3.472 + 41.368 + 12.747 = $59.4 Mil.
Accounts Receivable was $124.6 Mil.
Revenue was 163.422 + 135.909 + 123.978 + 152.239 = $575.5 Mil.
Gross Profit was 115.431 + 96.995 + 82.487 + 110.169 = $405.1 Mil.
Total Current Assets was $408.6 Mil.
Total Assets was $1,470.3 Mil.
Property, Plant and Equipment(Net PPE) was $288.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $73.8 Mil.
Selling, General & Admin. Expense(SGA) was $125.8 Mil.
Total Current Liabilities was $85.9 Mil.
Long-Term Debt was $362.3 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)
=(139.316 / 562.069) / (124.62 / 575.548)
=0.24786281 / 0.21652408
=1.1447

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)
=(91.373 / 575.548) / (110.134 / 562.069)
=0.70381966 / 0.69124253
=1.0182

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 - (886.919 + 264.247) / 1857.592) / (1 - (408.588 + 288.435) / 1470.291)
=0.38029126 / 0.52592854
=0.7231

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
=562.069 / 575.548
=0.9766

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))
=(73.751 / (73.751 + 288.435)) / (94.887 / (94.887 + 264.247))
=0.20362742 / 0.26421057
=0.7707

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)
=(165.6 / 562.069) / (125.758 / 575.548)
=0.29462575 / 0.21850132
=1.3484

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)
=((354.382 + 102.16) / 1857.592) / ((362.258 + 85.93) / 1470.291)
=0.24577087 / 0.30482945
=0.8063

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
=(-21.047 - 25.61 - 59.42) / 1857.592
=-0.0571

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 -2.76 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Mar14Jun14
DSRI 2.42582.00821.68420.55090.65540.87610.82281.0880.97481.1447
GMI 0.99151.07071.07221.1111.04780.9560.98680.96440.9881.0182
AQI 2.07472.39325.10610.93680.94290.95180.95450.89890.82970.7231
SGI 1.78552.08952.3292.32491.74671.47591.16991.08531.05430.9766
DEPI 1.14090.61150.46730.16580.43260.67020.79910.89170.8360.7707
SGAI 0.91960.79510.61680.50170.56420.61910.81070.96231.13071.3484
LVGI 4.1673.48023.51250.89210.87020.82460.82730.90670.78510.8063
TATA -0.0363-0.0778-0.0625-0.0965-0.0915-0.0703-0.0912-0.0769-0.0683-0.0571
M-score -1.21-1.16-0.08-2.10-2.50-2.46-2.88-2.72-2.82-2.76
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