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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.52 (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 -2.52 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: -2.52

-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 -2.64.


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 * 1.0234+0.528 * 0.9694+0.404 * 0.9175+0.892 * 1.0823+0.115 * 0.9778
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0078+4.679 * -0.0195-0.327 * 0.9728
=-2.52

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $3,078 Mil.
Revenue was 5688 + 5527 + 5536 + 5723 = $22,474 Mil.
Gross Profit was 4638 + 4509 + 4465 + 4689 = $18,301 Mil.
Total Current Assets was $42,947 Mil.
Total Assets was $75,471 Mil.
Property, Plant and Equipment(Net PPE) was $4,884 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,108 Mil.
Selling, General & Admin. Expense(SGA) was $5,155 Mil.
Total Current Liabilities was $10,830 Mil.
Long-Term Debt was $27,928 Mil.
Net Income was 1870 + 1900 + 1800 + 1863 = $7,433 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2677 + 1915 + 2060 + 2251 = $8,903 Mil.
Accounts Receivable was $2,779 Mil.
Revenue was 5370 + 5033 + 5331 + 5031 = $20,765 Mil.
Gross Profit was 4281 + 4000 + 4148 + 3963 = $16,392 Mil.
Total Current Assets was $37,736 Mil.
Total Assets was $71,209 Mil.
Property, Plant and Equipment(Net PPE) was $5,050 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,111 Mil.
Selling, General & Admin. Expense(SGA) was $4,726 Mil.
Total Current Liabilities was $6,891 Mil.
Long-Term Debt was $30,702 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 / 22474) / (2779 / 20765)
=0.13695826 / 0.13383097
=1.0234

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)
=(16392 / 20765) / (18301 / 22474)
=0.78940525 / 0.81431877
=0.9694

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 - (42947 + 4884) / 75471) / (1 - (37736 + 5050) / 71209)
=0.36623339 / 0.39914898
=0.9175

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
=22474 / 20765
=1.0823

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))
=(2111 / (2111 + 5050)) / (2108 / (2108 + 4884))
=0.29479123 / 0.30148741
=0.9778

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)
=(5155 / 22474) / (4726 / 20765)
=0.22937617 / 0.22759451
=1.0078

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)
=((27928 + 10830) / 75471) / ((30702 + 6891) / 71209)
=0.51354825 / 0.52792484
=0.9728

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
=(7433 - 0 - 8903) / 75471
=-0.0195

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 -2.52 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.91560.91520.8080.87880.93390.96561.13341.08951.12181.0234
GMI 1.01471.0281.04731.05291.02211.00720.98250.96860.97280.9694
AQI 1.45581.27941.12510.83380.83850.93030.93720.93360.89430.9175
SGI 1.08621.10211.09161.07431.08521.06711.08681.07971.07681.0823
DEPI 0.77970.70570.63070.67770.76260.83580.93540.95170.96480.9778
SGAI 0.950.90940.89010.84380.85810.89860.89450.95520.9921.0078
LVGI 1.00161.02040.98290.94940.93190.94870.95060.98361.02970.9728
TATA -0.0248-0.0288-0.0432-0.0492-0.0462-0.0581-0.0421-0.0299-0.0305-0.0195
M-score -2.42-2.50-2.72-2.79-2.72-2.73-2.48-2.50-2.51-2.52
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