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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

AMGN' s 10-Year Beneish M-Score Range
Min: -3.09   Max: -0.62
Current: -2.79

-3.09
-0.62

During the past 13 years, the highest Beneish M-Score of Amgen Inc was -0.62. The lowest was -3.09. And the median was -2.58.


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 * 0.8788+0.528 * 1.0529+0.404 * 0.8338+0.892 * 1.0743+0.115 * 0.6777
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8438+4.679 * -0.0492-0.327 * 0.9494
=-2.79

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,546 Mil.
Revenue was 5331 + 5031 + 5180 + 4521 = $20,063 Mil.
Gross Profit was 4148 + 3963 + 4099 + 3431 = $15,641 Mil.
Total Current Assets was $34,713 Mil.
Total Assets was $69,009 Mil.
Property, Plant and Equipment(Net PPE) was $5,223 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,092 Mil.
Selling, General & Admin. Expense(SGA) was $4,699 Mil.
Total Current Liabilities was $7,008 Mil.
Long-Term Debt was $30,215 Mil.
Net Income was 1294 + 1244 + 1547 + 1073 = $5,158 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2445 + 2741 + 2227 + 1142 = $8,555 Mil.
Accounts Receivable was $2,697 Mil.
Revenue was 5011 + 4748 + 4679 + 4238 = $18,676 Mil.
Gross Profit was 3982 + 3960 + 3894 + 3494 = $15,330 Mil.
Total Current Assets was $27,367 Mil.
Total Assets was $66,125 Mil.
Property, Plant and Equipment(Net PPE) was $5,349 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,286 Mil.
Selling, General & Admin. Expense(SGA) was $5,184 Mil.
Total Current Liabilities was $7,947 Mil.
Long-Term Debt was $29,623 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)
=(2546 / 20063) / (2697 / 18676)
=0.12690026 / 0.14440994
=0.8788

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)
=(3963 / 18676) / (4148 / 20063)
=0.82083958 / 0.77959428
=1.0529

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 - (34713 + 5223) / 69009) / (1 - (27367 + 5349) / 66125)
=0.42129287 / 0.50524008
=0.8338

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
=20063 / 18676
=1.0743

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))
=(1286 / (1286 + 5349)) / (2092 / (2092 + 5223))
=0.19382065 / 0.2859877
=0.6777

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)
=(4699 / 20063) / (5184 / 18676)
=0.23421223 / 0.2775755
=0.8438

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)
=((30215 + 7008) / 69009) / ((29623 + 7947) / 66125)
=0.53939341 / 0.56816635
=0.9494

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
=(5158 - 0 - 8555) / 69009
=-0.0492

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 -2.79 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.02771.0460.95550.97141.04241.07691.19820.78470.99020.8788
GMI 1.00410.97581.0310.9770.98811.00551.00981.03620.99251.0529
AQI 0.97690.93240.94540.93140.89660.90380.95121.00821.54440.8338
SGI 1.17821.14791.03531.01570.97591.02811.03511.1081.08171.0743
DEPI 0.94221.02260.83131.09030.99860.99380.95080.96430.87520.6777
SGAI 0.92651.0510.96451.10991.0331.01421.0880.96850.99550.8438
LVGI 0.93061.62531.05810.87040.94651.09831.38231.07030.95730.9494
TATA -0.0406-0.0775-0.0495-0.0531-0.0437-0.0267-0.0294-0.0283-0.0183-0.0492
M-score -2.46-2.92-2.76-2.75-2.70-2.58-2.56-2.71-2.29-2.79

Amgen Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.78470.77180.91950.92090.99020.91560.91520.8080.87880.9339
GMI 1.03621.02311.01791.00570.99251.01471.0281.04731.05291.0221
AQI 1.00820.991.01671.17481.54441.45581.27941.12510.83380.8385
SGI 1.1081.09611.07391.07551.08171.08621.10211.09161.07431.0852
DEPI 0.96430.94050.93390.95620.87520.77970.70570.63070.67770.9427
SGAI 0.96850.98280.98631.00720.99550.950.90940.89010.84380.8581
LVGI 1.07031.01310.94960.96050.95731.00161.02040.98290.94940.9319
TATA -0.0283-0.0264-0.0113-0.0074-0.0183-0.0248-0.0288-0.0432-0.0492-0.0247
M-score -2.71-2.73-2.51-2.44-2.29-2.42-2.50-2.72-2.79-2.59
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