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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

AMGN' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 0.34
Current: -2.5

-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 * 0.9152+0.528 * 1.028+0.404 * 1.2794+0.892 * 1.1021+0.115 * 0.7057
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9094+4.679 * -0.0288-0.327 * 1.0204
=-2.50

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,697 Mil.
Revenue was 5180 + 4521 + 5011 + 4748 = $19,460 Mil.
Gross Profit was 4099 + 3431 + 3982 + 3960 = $15,472 Mil.
Total Current Assets was $34,328 Mil.
Total Assets was $69,534 Mil.
Property, Plant and Equipment(Net PPE) was $5,371 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,756 Mil.
Selling, General & Admin. Expense(SGA) was $4,929 Mil.
Total Current Liabilities was $7,866 Mil.
Long-Term Debt was $30,828 Mil.
Net Income was 1547 + 1073 + 1021 + 1368 = $5,009 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2227 + 1142 + 1835 + 1807 = $7,011 Mil.
Accounts Receivable was $2,674 Mil.
Revenue was 4679 + 4238 + 4421 + 4319 = $17,657 Mil.
Gross Profit was 3894 + 3494 + 3499 + 3544 = $14,431 Mil.
Total Current Assets was $29,673 Mil.
Total Assets was $52,610 Mil.
Property, Plant and Equipment(Net PPE) was $5,293 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,114 Mil.
Selling, General & Admin. Expense(SGA) was $4,918 Mil.
Total Current Liabilities was $4,784 Mil.
Long-Term Debt was $23,908 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)
=(2697 / 19460) / (2674 / 17657)
=0.13859198 / 0.15144135
=0.9152

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)
=(3431 / 17657) / (4099 / 19460)
=0.81729626 / 0.7950668
=1.028

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 - (34328 + 5371) / 69534) / (1 - (29673 + 5293) / 52610)
=0.42907067 / 0.3353735
=1.2794

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
=19460 / 17657
=1.1021

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))
=(1114 / (1114 + 5293)) / (1756 / (1756 + 5371))
=0.17387233 / 0.24638698
=0.7057

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)
=(4929 / 19460) / (4918 / 17657)
=0.2532888 / 0.27852976
=0.9094

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)
=((30828 + 7866) / 69534) / ((23908 + 4784) / 52610)
=0.55647597 / 0.5453716
=1.0204

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
=(5009 - 0 - 7011) / 69534
=-0.0288

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 -2.50 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.13070.93020.90890.78470.77180.91951.1140.99020.91560.9152
GMI 1.01681.01961.02761.03621.02311.01791.00570.99251.01471.028
AQI 0.94710.97130.90391.00820.991.01671.17481.54441.45581.2794
SGI 1.04991.07311.08851.1081.09611.07391.07551.08171.08621.1021
DEPI 0.98390.98320.9860.96430.94050.93390.95620.87520.77970.7057
SGAI 1.04951.01420.96330.96850.98280.98631.00720.99550.950.9094
LVGI 1.57231.46271.39251.07031.01310.94960.96050.95731.00161.0204
TATA -0.0268-0.0395-0.039-0.0283-0.0264-0.0113-0.0074-0.0183-0.0248-0.0288
M-score -2.65-2.82-2.82-2.71-2.73-2.51-2.26-2.29-2.42-2.50
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