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Alexion Pharmaceuticals, Inc. (NAS:ALXN)
Beneish M-Score
-2.56 (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 -2.56 suggests that the company is not a manipulator.

ALXN' s 10-Year Beneish M-Score Range
Min: -4.58   Max: 38.17
Current: -2.56

-4.58
38.17

During the past 13 years, the highest Beneish M-Score of Alexion Pharmaceuticals, Inc. was 38.17. The lowest was -4.58. And the median was -2.56.


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 * 1.043+0.528 * 1.0567+0.404 * 0.7691+0.892 * 1.3679+0.115 * 1.0095
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9307+4.679 * -0.0734-0.327 * 1.1612
=-2.56

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $422 Mil.
Revenue was 441.909 + 400.405 + 370.091 + 338.941 = $1,551 Mil.
Gross Profit was 390.357 + 349.047 + 330.714 + 303.672 = $1,374 Mil.
Total Current Assets was $2,187 Mil.
Total Assets was $3,318 Mil.
Property, Plant and Equipment(Net PPE) was $201 Mil.
Depreciation, Depletion and Amortization(DDA) was $29 Mil.
Selling, General & Admin. Expense(SGA) was $490 Mil.
Total Current Liabilities was $582 Mil.
Long-Term Debt was $97 Mil.
Net Income was -18.992 + 93.785 + 95.885 + 82.217 = $253 Mil.
Non Operating Income was -0.841 + -0.547 + -0.09 + 0.503 = $-1 Mil.
Cash Flow from Operations was 208.881 + 144.275 + 97.696 + 46.497 = $497 Mil.
Accounts Receivable was $296 Mil.
Revenue was 320.526 + 294.136 + 274.719 + 244.733 = $1,134 Mil.
Gross Profit was 287.379 + 314.327 + 243.106 + 216.465 = $1,061 Mil.
Total Current Assets was $1,496 Mil.
Total Assets was $2,614 Mil.
Property, Plant and Equipment(Net PPE) was $166 Mil.
Depreciation, Depletion and Amortization(DDA) was $24 Mil.
Selling, General & Admin. Expense(SGA) was $385 Mil.
Total Current Liabilities was $360 Mil.
Long-Term Debt was $101 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)
=(421.752 / 1551.346) / (295.598 / 1134.114)
=0.27186198 / 0.26064223
=1.043

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)
=(349.047 / 1134.114) / (390.357 / 1551.346)
=0.9357763 / 0.88554713
=1.0567

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 - (2186.857 + 201.109) / 3317.696) / (1 - (1495.6 + 165.629) / 2613.56)
=0.28023363 / 0.36438077
=0.7691

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
=1551.346 / 1134.114
=1.3679

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))
=(23.887 / (23.887 + 165.629)) / (28.693 / (28.693 + 201.109))
=0.12604213 / 0.12485966
=1.0095

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)
=(489.72 / 1551.346) / (384.678 / 1134.114)
=0.31567426 / 0.33918812
=0.9307

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)
=((97.23 + 582.429) / 3317.696) / ((101 + 360.089) / 2613.56)
=0.20485873 / 0.17642182
=1.1612

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
=(252.895 - -0.975 - 497.349) / 3317.696
=-0.0734

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 -2.56 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.99990.99970.9110.90750.9620.83590.85010.90290.94691.043
GMI 1.00410.99971.00040.99790.94330.94160.94270.94471.05121.0567
AQI 1.05271.02691.83281.54741.49751.76690.70140.82660.84390.7691
SGI 1.43621.44821.46231.46461.46261.44761.42491.39181.37341.3679
DEPI 0.91820.92380.8870.84010.80250.76180.80820.85950.9121.0095
SGAI 0.91760.93840.93130.89520.8620.86230.86510.90180.94920.9307
LVGI 1.25511.1561.57941.41621.16941.08020.49610.62710.83851.1612
TATA -0.0572-0.0663-0.0554-0.0543-0.0688-0.0591-0.038-0.0138-0.0131-0.0734
M-score -2.41-2.43-2.26-2.32-2.31-2.26-2.40-2.26-2.24-2.56
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