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Alkermes PLC (NAS:ALKS)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

ALKS' s 10-Year Beneish M-Score Range
Min: -4.25   Max: 0.52
Current: -2.7

-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 -2.31.


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 * 0.725+0.528 * 0.9362+0.404 * 0.7879+0.892 * 1.5901+0.115 * 0.9638
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.206+4.679 * -0.0724-0.327 * 0.9858
=-2.70

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $142.0 Mil.
Revenue was 161.214 + 175.161 + 159.992 + 153.424 = $649.8 Mil.
Gross Profit was 121.24 + 128.793 + 112.657 + 110.134 = $472.8 Mil.
Total Current Assets was $1,003.5 Mil.
Total Assets was $1,924.8 Mil.
Property, Plant and Equipment(Net PPE) was $268.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $98.0 Mil.
Selling, General & Admin. Expense(SGA) was $220.4 Mil.
Total Current Liabilities was $114.2 Mil.
Long-Term Debt was $349.6 Mil.
Net Income was -30.657 + 30.514 + -39.956 + 3.735 = $-36.4 Mil.
Non Operating Income was -0.211 + 59.209 + -0.885 + 28.099 = $86.2 Mil.
Cash Flow from Operations was 2.077 + 13.643 + -7.809 + 8.777 = $16.7 Mil.
Accounts Receivable was $123.2 Mil.
Revenue was 130.212 + 0 + 139.802 + 138.631 = $408.6 Mil.
Gross Profit was 91.373 + 0 + 94.379 + 92.64 = $278.4 Mil.
Total Current Assets was $776.8 Mil.
Total Assets was $1,835.5 Mil.
Property, Plant and Equipment(Net PPE) was $269.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $93.3 Mil.
Selling, General & Admin. Expense(SGA) was $114.9 Mil.
Total Current Liabilities was $92.8 Mil.
Long-Term Debt was $356.0 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)
=(141.978 / 649.791) / (123.154 / 408.645)
=0.21849795 / 0.30137161
=0.725

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)
=(128.793 / 408.645) / (121.24 / 649.791)
=0.68125635 / 0.72765551
=0.9362

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 - (1003.548 + 268.76) / 1924.774) / (1 - (776.771 + 268.992) / 1835.478)
=0.33898317 / 0.43025032
=0.7879

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
=649.791 / 408.645
=1.5901

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))
=(93.318 / (93.318 + 268.992)) / (98.021 / (98.021 + 268.76))
=0.25756396 / 0.26724667
=0.9638

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)
=(220.405 / 649.791) / (114.937 / 408.645)
=0.33919368 / 0.28126369
=1.206

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)
=((349.638 + 114.217) / 1924.774) / ((355.963 + 92.759) / 1835.478)
=0.24099193 / 0.24447147
=0.9858

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
=(-36.364 - 86.212 - 16.688) / 1924.774
=-0.0724

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 -2.70 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.65540.87610.82281.0881.39191.41591.553710.725
GMI 1.04780.9560.98680.96441.03310.9870.97630.95620.9362
AQI 0.94290.95180.95450.89890.81810.72560.87860.8580.7879
SGI 1.74671.47591.16991.08530.710.75350.76781.40041.5901
DEPI 0.43260.67020.79910.89170.79060.83610.87643.70920.9638
SGAI 0.56420.61910.81070.96231.28721.36581.381.33321.206
LVGI 0.87020.82460.82730.90670.8020.83830.88020.87630.9858
TATA -0.0915-0.0703-0.0912-0.0769-0.0605-0.0748-0.0661-0.0655-0.0724
M-score -2.50-2.46-2.88-2.72-2.73-2.81-2.59-2.22-2.70
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