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Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-1.99 (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.

Alexion Pharmaceuticals Inc has a M-score of -1.99 signals that the company is a manipulator.

ALXN' s 10-Year Beneish M-Score Range
Min: -5.05   Max: 38.17
Current: -1.99

-5.05
38.17

During the past 13 years, the highest Beneish M-Score of Alexion Pharmaceuticals Inc was 38.17. The lowest was -5.05. And the median was -2.37.


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 Alexion Pharmaceuticals Inc 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 * 0.977+0.528 * 1.002+0.404 * 2.8964+0.892 * 1.2445+0.115 * 1.3392
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1027+4.679 * -0.0175-0.327 * 2.2552
=-1.99

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $536 Mil.
Revenue was 636.21 + 600.333 + 599.476 + 555.146 = $2,391 Mil.
Gross Profit was 584.203 + 530.934 + 550.037 + 503.288 = $2,168 Mil.
Total Current Assets was $2,533 Mil.
Total Assets was $13,168 Mil.
Property, Plant and Equipment(Net PPE) was $555 Mil.
Depreciation, Depletion and Amortization(DDA) was $51 Mil.
Selling, General & Admin. Expense(SGA) was $750 Mil.
Total Current Liabilities was $769 Mil.
Long-Term Debt was $3,498 Mil.
Net Income was 170.215 + 91.323 + 153.332 + 177.731 = $593 Mil.
Non Operating Income was -2.045 + 1.005 + -0.001 + -2.045 = $-3 Mil.
Cash Flow from Operations was 238.222 + 23.034 + 283.459 + 281.521 = $826 Mil.
Accounts Receivable was $441 Mil.
Revenue was 512.495 + 566.616 + 441.909 + 400.405 = $1,921 Mil.
Gross Profit was 472.869 + 533.677 + 390.357 + 349.047 = $1,746 Mil.
Total Current Assets was $2,341 Mil.
Total Assets was $3,554 Mil.
Property, Plant and Equipment(Net PPE) was $273 Mil.
Depreciation, Depletion and Amortization(DDA) was $35 Mil.
Selling, General & Admin. Expense(SGA) was $546 Mil.
Total Current Liabilities was $418 Mil.
Long-Term Debt was $93 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)
=(535.824 / 2391.165) / (440.699 / 1921.425)
=0.22408491 / 0.2293605
=0.977

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)
=(530.934 / 1921.425) / (584.203 / 2391.165)
=0.90867455 / 0.90686423
=1.002

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 - (2533.238 + 555.388) / 13167.719) / (1 - (2341.306 + 273.326) / 3553.81)
=0.76543956 / 0.26427355
=2.8964

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
=2391.165 / 1921.425
=1.2445

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))
=(34.721 / (34.721 + 273.326)) / (51.038 / (51.038 + 555.388))
=0.11271332 / 0.08416196
=1.3392

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)
=(749.94 / 2391.165) / (546.473 / 1921.425)
=0.31362955 / 0.28441027
=1.1027

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)
=((3498.31 + 769.169) / 13167.719) / ((93.015 + 417.701) / 3553.81)
=0.32408643 / 0.14370943
=2.2552

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
=(592.601 - -3.086 - 826.236) / 13167.719
=-0.0175

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.

Alexion Pharmaceuticals Inc has a M-score of -1.99 signals that the company is likely to 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.

Alexion Pharmaceuticals Inc Annual Data

Jul05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.03780.75140.69120.44751.02291.06080.99970.83591.0430.7128
GMI 111.10251.01861.00791.0030.99970.94161.05670.9603
AQI 1.43091.21050.4281.71522.48910.63621.02691.76690.76910.8609
SGI 0.23091.464346.23943.59651.49291.39851.44821.44761.36791.4399
DEPI 0.99342.79511.91740.87460.73270.79370.92380.76181.00951.1683
SGAI 5.67751.97760.03790.38620.86660.93850.93840.86230.93070.8937
LVGI 1.61250.86831.13490.6810.25731.16111.1561.08021.16120.8403
TATA -0.0715-0.0630.114-0.04140.2356-0.0607-0.0663-0.0591-0.07340.0045
M-score -4.30-2.4238.17-0.37-0.08-2.56-2.43-2.26-2.56-2.32

Alexion Pharmaceuticals Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.85010.90290.94691.0430.91450.85450.74230.71280.87760.977
GMI 0.94270.94471.05121.05671.03721.02770.9710.96030.99371.002
AQI 0.70140.82660.84390.76910.74960.77270.82250.86090.93752.8964
SGI 1.42491.39181.37341.36791.44831.45161.45191.43991.27451.2445
DEPI 0.80820.85950.9121.00951.0111.13491.281.16831.28531.3392
SGAI 0.86510.90180.94920.93070.86710.86630.85630.89371.05811.1027
LVGI 0.49610.62710.83851.16120.9631.01440.98820.84031.10722.2552
TATA -0.038-0.0138-0.0131-0.0734-0.0265-0.0074-0.02010.0045-0.0233-0.0175
M-score -2.40-2.26-2.24-2.56-2.33-2.29-2.43-2.32-2.50-1.99
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