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Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-2.43 (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 -2.43 suggests that the company is not a manipulator.

ALXN' s 10-Year Beneish M-Score Range
Min: -5.05   Max: 38.17
Current: -2.43

-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 -2.40.


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 * 0.7423+0.528 * 0.971+0.404 * 0.8225+0.892 * 1.4519+0.115 * 1.28
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8563+4.679 * -0.0201-0.327 * 0.9882
=-2.43

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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.
Net Income was 177.731 + 166.495 + 159.354 + -18.992 = $485 Mil.
Non Operating Income was -2.045 + -1.202 + 1.258 + -0.841 = $-3 Mil.
Cash Flow from Operations was 281.521 + 106.15 + -31.055 + 208.881 = $565 Mil.
Accounts Receivable was $405 Mil.
Revenue was 400.405 + 370.091 + 338.941 + 320.526 = $1,430 Mil.
Gross Profit was 349.047 + 330.714 + 303.672 + 287.379 = $1,271 Mil.
Total Current Assets was $1,916 Mil.
Total Assets was $3,050 Mil.
Property, Plant and Equipment(Net PPE) was $179 Mil.
Depreciation, Depletion and Amortization(DDA) was $27 Mil.
Selling, General & Admin. Expense(SGA) was $468 Mil.
Total Current Liabilities was $395 Mil.
Long-Term Debt was $89 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)
=(436.467 / 2076.166) / (404.956 / 1429.963)
=0.21022741 / 0.28319334
=0.7423

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)
=(472.869 / 1429.963) / (503.288 / 2076.166)
=0.88870271 / 0.9152404
=0.971

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 - (2559.878 + 328.476) / 3890.887) / (1 - (1915.502 + 178.842) / 3049.795)
=0.25766181 / 0.31328368
=0.8225

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
=2076.166 / 1429.963
=1.4519

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))
=(26.513 / (26.513 + 178.842)) / (36.849 / (36.849 + 328.476))
=0.12910813 / 0.10086635
=1.28

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)
=(581.252 / 2076.166) / (467.525 / 1429.963)
=0.27996413 / 0.32694902
=0.8563

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)
=((108.53 + 502.537) / 3890.887) / ((89.251 + 395.456) / 3049.795)
=0.15705082 / 0.15893101
=0.9882

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
=(484.588 - -2.83 - 565.497) / 3890.887
=-0.0201

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 -2.43 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 0.7831.43091.21050.4281.71522.48910.63621.02691.76690.7691
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 0.25315.67751.97760.03790.38620.86660.93850.93840.86230.9307
LVGI 0.83321.61250.86831.13490.6810.25731.16111.1561.08021.1612
TATA -0.0042-0.0715-0.0630.114-0.04140.2356-0.0607-0.0663-0.0591-0.0734
M-score 1.42-4.30-2.4238.17-0.37-0.08-2.56-2.43-2.26-2.56

Alexion Pharmaceuticals Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.90750.9620.83590.85010.90290.94691.0430.91450.85450.7423
GMI 0.99790.94330.94160.94270.94471.05121.05671.03721.02770.971
AQI 1.54741.49751.76690.70140.82660.84390.76910.74960.77270.8225
SGI 1.46461.46261.44761.42491.39181.37341.36791.44831.45161.4519
DEPI 0.84010.80250.76180.80820.85950.9121.00951.0111.13491.28
SGAI 0.89520.8620.86230.86510.90180.94920.93070.86710.86630.8563
LVGI 1.41621.16941.08020.49610.62710.83851.16120.9631.01440.9882
TATA -0.0543-0.0688-0.0591-0.038-0.0138-0.0131-0.0734-0.0265-0.0074-0.0201
M-score -2.32-2.31-2.26-2.40-2.26-2.24-2.56-2.33-2.29-2.43
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