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Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-2.36 (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 -2.70 suggests that the company is not a manipulator.

ALXN' s Beneish M-Score Range Over the Past 10 Years
Min: -5.1   Max: 38.17
Current: -2.36

-5.1
38.17

During the past 13 years, the highest Beneish M-Score of Alexion Pharmaceuticals Inc was 38.17. The lowest was -5.10. And the median was -2.35.


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 * 0.9636+0.528 * 0.9878+0.404 * 0.9869+0.892 * 1.18+0.115 * 0.2896
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0379+4.679 * -0.0564-0.327 * 0.9534
=-2.70

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $609 Mil.
Revenue was 753.116 + 701.038 + 700.867 + 666.637 = $2,822 Mil.
Gross Profit was 692.489 + 642.052 + 643.241 + 612.58 = $2,590 Mil.
Total Current Assets was $2,361 Mil.
Total Assets was $13,029 Mil.
Property, Plant and Equipment(Net PPE) was $825 Mil.
Depreciation, Depletion and Amortization(DDA) was $338 Mil.
Selling, General & Admin. Expense(SGA) was $918 Mil.
Total Current Liabilities was $658 Mil.
Long-Term Debt was $3,368 Mil.
Net Income was 114.943 + 92.166 + 66.604 + -183.757 = $90 Mil.
Non Operating Income was -2.82 + 0.091 + -1.059 + 2.795 = $-1 Mil.
Cash Flow from Operations was 243.933 + 167.984 + 190.857 + 223.086 = $826 Mil.
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.



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)
=(609.297 / 2821.658) / (535.824 / 2391.165)
=0.21593581 / 0.22408491
=0.9636

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)
=(2168.462 / 2391.165) / (2590.362 / 2821.658)
=0.90686423 / 0.91802834
=0.9878

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 - (2361.209 + 825.301) / 13029.347) / (1 - (2533.238 + 555.388) / 13167.719)
=0.75543594 / 0.76543956
=0.9869

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
=2821.658 / 2391.165
=1.18

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))
=(51.038 / (51.038 + 555.388)) / (338.059 / (338.059 + 825.301))
=0.08416196 / 0.29058847
=0.2896

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)
=(918.459 / 2821.658) / (749.94 / 2391.165)
=0.3255033 / 0.31362955
=1.0379

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)
=((3367.531 + 658.462) / 13029.347) / ((3498.31 + 769.169) / 13167.719)
=0.30899423 / 0.32408643
=0.9534

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
=(89.956 - -0.993 - 825.86) / 13029.347
=-0.0564

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 -2.70 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 local exchange's 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 1.21050.4281.71522.48910.63621.02691.76690.76910.86093.1598
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 0.86831.13490.6810.25731.16111.1561.08021.16120.84031.8253
TATA -0.06460.114-0.04140.2356-0.0607-0.0663-0.0591-0.07340.0045-0.0406
M-score -2.4338.17-0.37-0.08-2.56-2.43-2.26-2.56-2.32-1.94

Alexion Pharmaceuticals Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.85450.74230.71280.87760.9770.97361.05581.02410.96361.1194
GMI 1.02770.9710.96030.99371.0021.00561.01280.98860.98780.9937
AQI 0.77270.82250.86090.93752.89642.96663.15983.05220.98690.9613
SGI 1.45161.45191.43991.27451.24451.20541.16581.19291.181.1804
DEPI 1.13491.281.16831.28531.33920.78360.5540.39130.28960.4523
SGAI 0.86630.85630.89371.05811.10271.14861.17411.10641.03790.9854
LVGI 1.01440.98820.84031.10722.25522.05331.82531.97850.95340.977
TATA -0.0074-0.02010.0045-0.0233-0.0175-0.0409-0.0406-0.0527-0.0564-0.0173
M-score -2.29-2.43-2.32-2.50-1.99-2.11-1.94-2.12-2.70-2.36
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