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Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-2.29 (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 -2.29 suggests that the company is not a manipulator.

ALXN' s 10-Year Beneish M-Score Range
Min: -5.05   Max: 38.17
Current: -2.29

-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 * 0.8545+0.528 * 1.0277+0.404 * 0.7727+0.892 * 1.4516+0.115 * 1.1349
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8663+4.679 * -0.0074-0.327 * 1.0144
=-2.29

* 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 (Jun13) TTM:
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.
Net Income was 166.495 + 159.354 + -18.992 + 93.785 = $401 Mil.
Non Operating Income was -1.202 + 1.258 + -0.841 + -0.547 = $-1 Mil.
Cash Flow from Operations was 106.15 + -31.055 + 208.881 + 144.275 = $428 Mil.
Accounts Receivable was $355 Mil.
Revenue was 370.091 + 338.941 + 320.526 + 294.136 = $1,324 Mil.
Gross Profit was 330.714 + 303.672 + 287.379 + 314.327 = $1,236 Mil.
Total Current Assets was $1,679 Mil.
Total Assets was $2,815 Mil.
Property, Plant and Equipment(Net PPE) was $174 Mil.
Depreciation, Depletion and Amortization(DDA) was $25 Mil.
Selling, General & Admin. Expense(SGA) was $435 Mil.
Total Current Liabilities was $303 Mil.
Long-Term Debt was $96 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)
=(440.699 / 1921.425) / (355.284 / 1323.694)
=0.2293605 / 0.26840342
=0.8545

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)
=(533.677 / 1323.694) / (472.869 / 1921.425)
=0.93382005 / 0.90867455
=1.0277

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 - (2341.306 + 273.326) / 3553.81) / (1 - (1678.633 + 173.721) / 2815.238)
=0.26427355 / 0.34202579
=0.7727

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
=1921.425 / 1323.694
=1.4516

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))
=(25.482 / (25.482 + 173.721)) / (34.721 / (34.721 + 273.326))
=0.12791976 / 0.11271332
=1.1349

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)
=(546.473 / 1921.425) / (434.596 / 1323.694)
=0.28441027 / 0.32832059
=0.8663

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)
=((93.015 + 417.701) / 3553.81) / ((95.854 + 302.978) / 2815.238)
=0.14370943 / 0.14166902
=1.0144

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
=(400.642 - -1.332 - 428.251) / 3553.81
=-0.0074

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 -2.29 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.

Alexion Pharmaceuticals Inc Annual Data

Jul04Jul05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03281.03780.75140.69120.44751.02291.06080.99970.83591.043
GMI 1111.10251.01861.00791.0030.99970.94161.0567
AQI 0.7831.43091.21050.4281.71522.46850.64151.02691.76690.7691
SGI 5.25540.23091.464346.23943.59651.49291.39851.44821.44761.3679
DEPI 0.96940.99342.79511.91740.87460.73270.79370.92380.76181.0095
SGAI 0.25315.67751.97760.03790.38620.86660.94150.93540.86230.9307
LVGI 0.83321.61250.86831.13490.6810.25611.16051.1621.08021.1612
TATA -0.0042-0.0715-0.0630.114-0.04730.2346-0.0631-0.0663-0.0591-0.0734
M-score 1.42-4.30-2.4238.17-0.40-0.09-2.57-2.43-2.26-2.56

Alexion Pharmaceuticals Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.9110.90750.9620.83590.85010.90290.94691.0430.91450.8545
GMI 1.00040.99790.94330.94160.94270.94471.05121.05671.03721.0277
AQI 1.83281.54741.49751.76690.70140.82660.84390.76910.74960.7727
SGI 1.46231.46461.46261.44761.42491.39181.37341.36791.44831.4516
DEPI 0.8870.84010.80250.76180.80820.85950.9121.00951.0111.1349
SGAI 0.93130.89520.8620.86230.86510.90180.94920.93070.86710.8663
LVGI 1.57941.41621.16941.08020.49610.62710.83851.16120.9631.0144
TATA -0.0554-0.0543-0.0688-0.0591-0.038-0.0138-0.0131-0.0734-0.0265-0.0074
M-score -2.26-2.32-2.31-2.26-2.40-2.26-2.24-2.56-2.33-2.29
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