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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

AMGN' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 0.34
Current: -2.69

-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 -2.68.


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 * 0.9656+0.528 * 1.0072+0.404 * 0.9303+0.892 * 1.0671+0.115 * 0.8358
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8986+4.679 * -0.0494-0.327 * 0.9487
=-2.69

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 1653 + 1623 + 1294 + 1244 = $5,814 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2814 + 1329 + 2445 + 2741 = $9,329 Mil.
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.



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)
=(2779 / 20765) / (2697 / 19460)
=0.13383097 / 0.13859198
=0.9656

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)
=(4000 / 19460) / (4281 / 20765)
=0.7950668 / 0.78940525
=1.0072

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 - (37736 + 5050) / 71209) / (1 - (34328 + 5371) / 69534)
=0.39914898 / 0.42907067
=0.9303

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
=20765 / 19460
=1.0671

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))
=(1756 / (1756 + 5371)) / (2111 / (2111 + 5050))
=0.24638698 / 0.29479123
=0.8358

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)
=(4726 / 20765) / (4929 / 19460)
=0.22759451 / 0.2532888
=0.8986

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)
=((30702 + 6891) / 71209) / ((30828 + 7866) / 69534)
=0.52792484 / 0.55647597
=0.9487

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
=(5814 - 0 - 9329) / 71209
=-0.0494

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 -2.69 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 1.00410.97581.0310.9770.98811.00551.00981.0161.01241.0529
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 0.92651.0510.96451.10991.0331.01421.0880.96590.99820.8438
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 -2.46-2.92-2.76-2.75-2.70-2.58-2.56-2.72-2.28-2.79

Amgen Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.77180.91950.92090.99020.91560.91520.8080.87880.93390.9656
GMI 1.01361.01851.01621.01241.02961.03791.05231.05291.02211.0072
AQI 0.991.01671.17481.54441.45581.27941.12510.83380.83850.9303
SGI 1.09611.07391.07551.08171.08621.10211.09161.07431.08521.0671
DEPI 0.94050.93390.95620.87520.77970.70570.63070.67770.76260.8358
SGAI 0.98140.98621.00880.99820.9520.91070.89060.84380.85810.8986
LVGI 1.01310.94960.96050.95731.00161.02040.98290.94940.93190.9487
TATA -0.0264-0.0113-0.0074-0.0183-0.0248-0.0288-0.0432-0.0492-0.044-0.0494
M-score -2.73-2.51-2.43-2.28-2.41-2.49-2.72-2.79-2.70-2.69
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