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Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-1.95 (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 -1.95 signals that the company is a manipulator.

ALXN' s Beneish M-Score Range Over the Past 10 Years
Min: -4.63   Max: 38.17
Current: -1.95

-4.63
38.17

During the past 13 years, the highest Beneish M-Score of Alexion Pharmaceuticals Inc was 38.17. The lowest was -4.63. And the median was -2.38.


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 * 1.0558+0.528 * 1.0128+0.404 * 3.1597+0.892 * 1.1658+0.115 * 0.554
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1741+4.679 * -0.0405-0.327 * 1.836
=-1.95

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $533 Mil.
Revenue was 700.867 + 666.637 + 636.21 + 600.333 = $2,604 Mil.
Gross Profit was 643.241 + 612.58 + 584.203 + 530.934 = $2,371 Mil.
Total Current Assets was $2,425 Mil.
Total Assets was $13,133 Mil.
Property, Plant and Equipment(Net PPE) was $697 Mil.
Depreciation, Depletion and Amortization(DDA) was $167 Mil.
Selling, General & Admin. Expense(SGA) was $863 Mil.
Total Current Liabilities was $718 Mil.
Long-Term Debt was $3,433 Mil.
Net Income was 66.604 + -183.757 + 170.215 + 91.323 = $144 Mil.
Non Operating Income was -1.059 + 2.795 + -2.045 + 1.005 = $1 Mil.
Cash Flow from Operations was 190.857 + 223.086 + 238.222 + 23.034 = $675 Mil.
Accounts Receivable was $433 Mil.
Revenue was 599.476 + 555.146 + 512.495 + 566.616 = $2,234 Mil.
Gross Profit was 550.037 + 503.288 + 472.869 + 533.677 = $2,060 Mil.
Total Current Assets was $2,796 Mil.
Total Assets was $4,202 Mil.
Property, Plant and Equipment(Net PPE) was $392 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $630 Mil.
Total Current Liabilities was $607 Mil.
Long-Term Debt was $117 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)
=(532.832 / 2604.047) / (432.888 / 2233.733)
=0.20461689 / 0.19379577
=1.0558

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)
=(612.58 / 2233.733) / (643.241 / 2604.047)
=0.92216527 / 0.91048971
=1.0128

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 - (2425.349 + 697.025) / 13133.23) / (1 - (2796.029 + 392.248) / 4201.962)
=0.76225392 / 0.24124088
=3.1597

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
=2604.047 / 2233.733
=1.1658

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))
=(46.939 / (46.939 + 392.248)) / (166.621 / (166.621 + 697.025))
=0.10687703 / 0.19292743
=0.554

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)
=(862.595 / 2604.047) / (630.209 / 2233.733)
=0.3312517 / 0.28213265
=1.1741

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)
=((3432.557 + 718.25) / 13133.23) / ((116.599 + 606.74) / 4201.962)
=0.31605378 / 0.17214316
=1.836

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
=(144.385 - 0.696 - 675.199) / 13133.23
=-0.0405

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 -1.95 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.75140.69120.44751.02291.06080.99970.83591.0430.71281.0558
GMI 11.10251.01861.00791.0030.99970.99141.00360.96031.0128
AQI 1.21050.4281.71522.48910.63621.02691.76690.76910.86093.1597
SGI 1.464346.23943.59651.49291.39851.44821.44761.36791.43991.1658
DEPI 2.79511.91740.87460.73270.79370.92380.76181.00951.16830.554
SGAI 1.97760.03790.38620.86660.94150.93540.86230.93070.89371.1741
LVGI 0.86831.13490.6810.25731.16111.1561.08021.16120.84031.836
TATA -0.06460.114-0.04730.2346-0.0607-0.0663-0.0591-0.07340.0045-0.0405
M-score -2.4338.17-0.40-0.08-2.56-2.43-2.23-2.59-2.32-1.95

Alexion Pharmaceuticals Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0430.91450.85450.74230.71280.87760.9770.97361.05581.0241
GMI 1.05671.03721.02770.9710.96030.99371.0021.00561.01280.9886
AQI 0.76910.74960.77270.82250.86090.93752.89642.96663.15973.0522
SGI 1.36791.44831.45161.45191.43991.27451.24451.20541.16581.1929
DEPI 1.00951.0111.13491.281.16831.28531.33920.78360.5540.412
SGAI 0.93070.86710.86630.85630.89371.05811.10271.14861.17411.1064
LVGI 1.16120.9631.01440.98820.84031.10722.25522.05331.8361.9785
TATA -0.0734-0.0265-0.0074-0.02010.0045-0.0233-0.0175-0.0409-0.0405-0.0396
M-score -2.56-2.33-2.29-2.43-2.32-2.50-1.99-2.11-1.95-2.05
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