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Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-2.11 (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 -2.11 signals that the company is a manipulator.

ALXN' s Beneish M-Score Range Over the Past 10 Years
Min: -5.23   Max: 34.59
Current: -2.11

-5.23
34.59

During the past 13 years, the highest Beneish M-Score of Alexion Pharmaceuticals Inc was 34.59. The lowest was -5.23. And the median was -2.40.


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 * 0.9736+0.528 * 1.0056+0.404 * 2.9666+0.892 * 1.2054+0.115 * 0.7836
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1486+4.679 * -0.0409-0.327 * 2.0533
=-2.11

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $512 Mil.
Revenue was 666.637 + 636.21 + 600.333 + 599.476 = $2,503 Mil.
Gross Profit was 612.58 + 584.203 + 530.934 + 550.037 = $2,278 Mil.
Total Current Assets was $2,480 Mil.
Total Assets was $13,153 Mil.
Property, Plant and Equipment(Net PPE) was $619 Mil.
Depreciation, Depletion and Amortization(DDA) was $91 Mil.
Selling, General & Admin. Expense(SGA) was $805 Mil.
Total Current Liabilities was $767 Mil.
Long-Term Debt was $3,475 Mil.
Net Income was -183.757 + 170.215 + 91.323 + 153.332 = $231 Mil.
Non Operating Income was 2.795 + -2.045 + 1.005 + -0.001 = $2 Mil.
Cash Flow from Operations was 223.086 + 238.222 + 23.034 + 283.459 = $768 Mil.
Accounts Receivable was $436 Mil.
Revenue was 555.146 + 512.495 + 566.616 + 441.909 = $2,076 Mil.
Gross Profit was 503.288 + 472.869 + 533.677 + 390.357 = $1,900 Mil.
Total Current Assets was $2,560 Mil.
Total Assets was $3,891 Mil.
Property, Plant and Equipment(Net PPE) was $328 Mil.
Depreciation, Depletion and Amortization(DDA) was $37 Mil.
Selling, General & Admin. Expense(SGA) was $581 Mil.
Total Current Liabilities was $503 Mil.
Long-Term Debt was $109 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)
=(512.253 / 2502.656) / (436.467 / 2076.166)
=0.20468374 / 0.21022741
=0.9736

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)
=(584.203 / 2076.166) / (612.58 / 2502.656)
=0.9152404 / 0.91013467
=1.0056

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 - (2480.219 + 618.733) / 13153.015) / (1 - (2559.878 + 328.476) / 3890.887)
=0.76439227 / 0.25766181
=2.9666

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
=2502.656 / 2076.166
=1.2054

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))
=(36.849 / (36.849 + 328.476)) / (91.407 / (91.407 + 618.733))
=0.10086635 / 0.12871687
=0.7836

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)
=(804.795 / 2502.656) / (581.252 / 2076.166)
=0.32157636 / 0.27996413
=1.1486

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)
=((3474.604 + 766.86) / 13153.015) / ((108.53 + 502.537) / 3890.887)
=0.32247086 / 0.15705082
=2.0533

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
=(231.113 - 1.754 - 767.801) / 13153.015
=-0.0409

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 -2.11 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 11.10251.01861.00791.0030.99970.94161.05670.96031.0128
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 1.97760.03790.38620.86660.93850.93840.86230.93070.89371.1741
LVGI 0.86831.13490.6810.25731.16111.1561.08021.16120.84031.836
TATA -0.0630.114-0.04140.2356-0.0607-0.0663-0.0591-0.07340.0045-0.0405
M-score -2.4238.17-0.37-0.08-2.56-2.43-2.26-2.56-2.32-1.95

Alexion Pharmaceuticals Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.94691.0430.91450.85450.74230.71280.87760.9770.97361.0558
GMI 1.05121.05671.03721.02770.9710.96030.99371.0021.00561.0128
AQI 0.84390.76910.74960.77270.82250.86090.93752.89642.96663.1597
SGI 1.37341.36791.44831.45161.45191.43991.27451.24451.20541.1658
DEPI 0.9121.00951.0111.13491.281.16831.28531.33920.78360.554
SGAI 0.94920.93070.86710.86630.85630.89371.05811.10271.14861.1741
LVGI 0.83851.16120.9631.01440.98820.84031.10722.25522.05331.836
TATA -0.0131-0.0734-0.0265-0.0074-0.02010.0045-0.0233-0.0175-0.0409-0.0405
M-score -2.24-2.56-2.33-2.29-2.43-2.32-2.50-1.99-2.11-1.95
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