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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.
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.
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|
* 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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(91.373 / 575.548)||/||(110.134 / 562.069)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-21.047 - 25.61||-||59.42)||/||1857.592|
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.
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
Alkermes PLC Annual Data
Alkermes PLC Quarterly Data