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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.42 (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 -2.42 suggests that the company is not a manipulator.

AMGN' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 0.34
Current: -2.42

-3.09
0.34

During the past 13 years, the highest Beneish M-Score of Amgen Inc was 0.34. The lowest was -3.09. And the median was -2.67.


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 * 0.9156+0.528 * 1.0147+0.404 * 1.4558+0.892 * 1.0862+0.115 * 0.7797
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.95+4.679 * -0.0248-0.327 * 1.0016
=-2.42

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $2,514 Mil.
Revenue was 4521 + 5011 + 4748 + 4679 = $18,959 Mil.
Gross Profit was 3431 + 3982 + 3960 + 3894 = $15,267 Mil.
Total Current Assets was $28,302 Mil.
Total Assets was $67,004 Mil.
Property, Plant and Equipment(Net PPE) was $5,365 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,527 Mil.
Selling, General & Admin. Expense(SGA) was $5,049 Mil.
Total Current Liabilities was $8,203 Mil.
Long-Term Debt was $29,519 Mil.
Net Income was 1073 + 1021 + 1368 + 1258 = $4,720 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1142 + 1835 + 1807 + 1600 = $6,384 Mil.
Accounts Receivable was $2,528 Mil.
Revenue was 4238 + 4421 + 4319 + 4477 = $17,455 Mil.
Gross Profit was 3494 + 3499 + 3544 + 3725 = $14,262 Mil.
Total Current Assets was $28,695 Mil.
Total Assets was $51,640 Mil.
Property, Plant and Equipment(Net PPE) was $5,296 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,106 Mil.
Selling, General & Admin. Expense(SGA) was $4,893 Mil.
Total Current Liabilities was $5,142 Mil.
Long-Term Debt was $23,885 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)
=(2514 / 18959) / (2528 / 17455)
=0.13260193 / 0.14482956
=0.9156

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)
=(3982 / 17455) / (3431 / 18959)
=0.81707247 / 0.80526399
=1.0147

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 - (28302 + 5365) / 67004) / (1 - (28695 + 5296) / 51640)
=0.49753746 / 0.34176995
=1.4558

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
=18959 / 17455
=1.0862

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))
=(1106 / (1106 + 5296)) / (1527 / (1527 + 5365))
=0.17275851 / 0.22156123
=0.7797

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)
=(5049 / 18959) / (4893 / 17455)
=0.26631151 / 0.28032082
=0.95

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)
=((29519 + 8203) / 67004) / ((23885 + 5142) / 51640)
=0.56298131 / 0.56210302
=1.0016

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
=(4720 - 0 - 6384) / 67004
=-0.0248

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 -2.42 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.1481.02771.0460.95550.97141.04241.07691.19820.78470.9902
GMI 1.00431.00410.97581.0310.9770.98811.00551.00981.03620.9925
AQI 0.91920.97690.93240.94540.93140.89660.90380.95121.00821.5444
SGI 1.26261.17821.14791.03531.01570.97591.02811.03511.1081.0817
DEPI 1.13630.94221.02260.83131.09030.99860.99380.95080.96430.8752
SGAI 1.03450.92651.0510.96451.10991.0331.01421.0880.96850.9955
LVGI 1.30660.93061.62531.05810.87040.94651.09831.38231.07030.9573
TATA -0.0473-0.0406-0.0775-0.0495-0.0531-0.0437-0.0267-0.0294-0.0283-0.0183
M-score -2.45-2.46-2.92-2.76-2.75-2.70-2.58-2.56-2.71-2.29

Amgen Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.19821.13070.93020.90890.78470.77180.91951.1140.99020.9156
GMI 1.00981.01681.01961.02761.03621.02311.01791.00570.99251.0147
AQI 0.95120.94710.97130.90391.00820.991.01671.17481.54441.4558
SGI 1.03511.04991.07311.08851.1081.09611.07391.07551.08171.0862
DEPI 0.95080.98390.98320.9860.96430.94050.93390.95620.87520.7797
SGAI 1.0881.04951.01420.96330.96850.98280.98631.00720.99550.95
LVGI 1.38231.57231.46271.39251.07031.01310.94960.96050.95731.0016
TATA -0.0294-0.0268-0.0395-0.039-0.0283-0.0264-0.0113-0.0074-0.0183-0.0248
M-score -2.56-2.65-2.82-2.82-2.71-2.73-2.51-2.26-2.29-2.42
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