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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

AMGN' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99   Max: -0.6
Current: -2.65

-2.99
-0.6

During the past 13 years, the highest Beneish M-Score of Amgen Inc was -0.60. The lowest was -2.99. And the median was -2.57.


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 * 0.9957+0.528 * 0.9828+0.404 * 0.8731+0.892 * 1.0614+0.115 * 1.0087
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9842+4.679 * -0.0339-0.327 * 1.0052
=-2.65

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $3,165 Mil.
Revenue was 5965 + 5811 + 5688 + 5527 = $22,991 Mil.
Gross Profit was 4898 + 4784 + 4638 + 4509 = $18,829 Mil.
Total Current Assets was $46,010 Mil.
Total Assets was $77,626 Mil.
Property, Plant and Equipment(Net PPE) was $4,961 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,105 Mil.
Selling, General & Admin. Expense(SGA) was $5,062 Mil.
Total Current Liabilities was $11,204 Mil.
Long-Term Debt was $30,193 Mil.
Net Income was 1935 + 2017 + 1870 + 1900 = $7,722 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 3100 + 2662 + 2677 + 1915 = $10,354 Mil.
Accounts Receivable was $2,995 Mil.
Revenue was 5536 + 5723 + 5370 + 5033 = $21,662 Mil.
Gross Profit was 4465 + 4689 + 4281 + 4000 = $17,435 Mil.
Total Current Assets was $38,518 Mil.
Total Assets was $71,576 Mil.
Property, Plant and Equipment(Net PPE) was $4,907 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,108 Mil.
Selling, General & Admin. Expense(SGA) was $4,846 Mil.
Total Current Liabilities was $8,667 Mil.
Long-Term Debt was $29,306 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)
=(3165 / 22991) / (2995 / 21662)
=0.13766256 / 0.13826055
=0.9957

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)
=(17435 / 21662) / (18829 / 22991)
=0.80486566 / 0.81897264
=0.9828

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 - (46010 + 4961) / 77626) / (1 - (38518 + 4907) / 71576)
=0.34337722 / 0.39330222
=0.8731

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
=22991 / 21662
=1.0614

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))
=(2108 / (2108 + 4907)) / (2105 / (2105 + 4961))
=0.30049893 / 0.29790546
=1.0087

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)
=(5062 / 22991) / (4846 / 21662)
=0.22017311 / 0.22370972
=0.9842

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)
=((30193 + 11204) / 77626) / ((29306 + 8667) / 71576)
=0.53328782 / 0.53052699
=1.0052

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
=(7722 - 0 - 10354) / 77626
=-0.0339

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 -2.65 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.

Amgen Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.95550.97141.04241.07691.19820.78470.99020.87881.08950.9957
GMI 1.0310.9770.98811.00551.00981.0161.01241.05290.96860.9828
AQI 0.94540.93140.89660.90380.95121.00821.54440.83380.93360.8731
SGI 1.03531.01570.97591.02811.03511.1081.08171.07431.07971.0614
DEPI 0.83131.09030.99860.99380.95080.96430.87520.67770.95171.0087
SGAI 0.96451.10991.0331.01421.0880.96590.99820.84380.95520.9842
LVGI 1.05810.87040.94651.09831.38231.07030.95730.94940.98361.0052
TATA -0.0645-0.0492-0.0437-0.0267-0.0294-0.0283-0.0183-0.0492-0.0299-0.0339
M-score -2.83-2.73-2.70-2.58-2.56-2.72-2.28-2.79-2.50-2.65

Amgen Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.8080.87880.93390.96561.13341.08951.12181.02341.04450.9957
GMI 1.05231.05291.02211.00720.98250.96860.97280.96940.97840.9828
AQI 1.12510.83380.83850.93030.93720.93360.89430.91750.89850.8731
SGI 1.09161.07431.08521.06711.08681.07971.07681.08231.05151.0614
DEPI 0.63070.67770.76260.83580.93540.95170.96480.97780.99031.0087
SGAI 0.89060.84380.85810.89860.89450.95520.9921.00781.03060.9842
LVGI 0.98290.94940.93190.94870.95060.98361.02970.97281.00241.0052
TATA -0.0432-0.0492-0.044-0.0494-0.0421-0.0299-0.0326-0.0277-0.0221-0.0339
M-score -2.72-2.79-2.70-2.69-2.48-2.50-2.52-2.56-2.56-2.65
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