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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.51 (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.

Amgen Inc has a M-score of -2.51 suggests that the company is not a manipulator.

AMGN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Max: 0.36
Current: -2.51

-3.17
0.36

During the past 13 years, the highest Beneish M-Score of Amgen Inc was 0.36. The lowest was -3.17. And the median was -2.65.


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 Amgen 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 * 1.1218+0.528 * 0.9728+0.404 * 0.8943+0.892 * 1.0768+0.115 * 0.9648
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.992+4.679 * -0.0305-0.327 * 1.0297
=-2.51

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $3,078 Mil.
Revenue was 5527 + 5536 + 5723 + 5370 = $22,156 Mil.
Gross Profit was 4509 + 4465 + 4689 + 4281 = $17,944 Mil.
Total Current Assets was $42,206 Mil.
Total Assets was $75,116 Mil.
Property, Plant and Equipment(Net PPE) was $4,885 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,105 Mil.
Selling, General & Admin. Expense(SGA) was $5,023 Mil.
Total Current Liabilities was $8,523 Mil.
Long-Term Debt was $32,060 Mil.
Net Income was 1900 + 1800 + 1863 + 1653 = $7,216 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1915 + 2060 + 2874 + 2661 = $9,510 Mil.
Accounts Receivable was $2,548 Mil.
Revenue was 5033 + 5331 + 5031 + 5180 = $20,575 Mil.
Gross Profit was 4000 + 4148 + 3963 + 4099 = $16,210 Mil.
Total Current Assets was $35,064 Mil.
Total Assets was $68,952 Mil.
Property, Plant and Equipment(Net PPE) was $5,123 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,098 Mil.
Selling, General & Admin. Expense(SGA) was $4,702 Mil.
Total Current Liabilities was $6,336 Mil.
Long-Term Debt was $29,841 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)
=(3078 / 22156) / (2548 / 20575)
=0.13892399 / 0.12383961
=1.1218

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)
=(16210 / 20575) / (17944 / 22156)
=0.78784933 / 0.80989348
=0.9728

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 - (42206 + 4885) / 75116) / (1 - (35064 + 5123) / 68952)
=0.37308962 / 0.41717427
=0.8943

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
=22156 / 20575
=1.0768

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))
=(2098 / (2098 + 5123)) / (2105 / (2105 + 4885))
=0.29054148 / 0.30114449
=0.9648

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)
=(5023 / 22156) / (4702 / 20575)
=0.2267106 / 0.22852977
=0.992

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)
=((32060 + 8523) / 75116) / ((29841 + 6336) / 68952)
=0.54027105 / 0.52466934
=1.0297

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
=(7216 - 0 - 9510) / 75116
=-0.0305

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.

Amgen Inc has a M-score of -2.51 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.

Amgen Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0460.95550.97141.04241.07691.19820.78470.99020.87881.0895
GMI 0.97581.0310.9770.98811.00551.03181.01410.99251.05290.9686
AQI 0.93240.94540.93140.89660.90380.95121.00821.54440.83380.9336
SGI 1.14791.03531.01570.97591.02811.03511.1081.08171.07431.0797
DEPI 1.02260.83131.09030.99860.99380.95080.96430.87520.67770.9517
SGAI 1.0510.96451.10991.0331.01421.09120.96570.99550.84380.9552
LVGI 1.62531.05810.87040.94651.09831.38231.07030.95730.94940.9836
TATA -0.0722-0.0645-0.0531-0.0437-0.0267-0.0294-0.0283-0.0183-0.0492-0.0299
M-score -2.89-2.83-2.75-2.70-2.58-2.55-2.72-2.29-2.79-2.50

Amgen Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.99020.91560.91520.8080.87880.93390.96561.13341.08951.1218
GMI 0.99251.01471.0281.04731.05291.02211.00720.98250.96860.9728
AQI 1.54441.45581.27941.12510.83380.83850.93030.93720.93360.8943
SGI 1.08171.08621.10211.09161.07431.08521.06711.08681.07971.0768
DEPI 0.87520.77970.70570.63070.67770.76260.83580.93540.95170.9648
SGAI 0.99550.950.90940.89010.84380.85810.89860.89450.95520.992
LVGI 0.95731.00161.02040.98290.94940.93190.94870.95060.98361.0297
TATA -0.0183-0.0248-0.0288-0.0432-0.0492-0.0462-0.0494-0.0421-0.0299-0.0305
M-score -2.29-2.42-2.50-2.72-2.79-2.72-2.69-2.48-2.50-2.51
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