Switch to:
Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.72 (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 -2.72 suggests that the company is not a manipulator.

AMGN' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 0.34
Current: -2.72

-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 * 0.808+0.528 * 1.0523+0.404 * 1.1251+0.892 * 1.0916+0.115 * 0.6307
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8906+4.679 * -0.0432-0.327 * 0.9829
=-2.72

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,355 Mil.
Revenue was 5031 + 5180 + 4521 + 5011 = $19,743 Mil.
Gross Profit was 3963 + 4099 + 3431 + 3982 = $15,475 Mil.
Total Current Assets was $36,048 Mil.
Total Assets was $70,775 Mil.
Property, Plant and Equipment(Net PPE) was $5,267 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,011 Mil.
Selling, General & Admin. Expense(SGA) was $4,893 Mil.
Total Current Liabilities was $8,551 Mil.
Long-Term Debt was $30,480 Mil.
Net Income was 1244 + 1547 + 1073 + 1021 = $4,885 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 2741 + 2227 + 1142 + 1835 = $7,945 Mil.
Accounts Receivable was $2,670 Mil.
Revenue was 4748 + 4679 + 4238 + 4421 = $18,086 Mil.
Gross Profit was 3960 + 3894 + 3494 + 3569 = $14,917 Mil.
Total Current Assets was $30,675 Mil.
Total Assets was $57,073 Mil.
Property, Plant and Equipment(Net PPE) was $5,283 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,115 Mil.
Selling, General & Admin. Expense(SGA) was $5,033 Mil.
Total Current Liabilities was $4,843 Mil.
Long-Term Debt was $27,178 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)
=(2355 / 19743) / (2670 / 18086)
=0.11928278 / 0.147628
=0.808

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)
=(4099 / 18086) / (3963 / 19743)
=0.8247816 / 0.78382211
=1.0523

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 - (36048 + 5267) / 70775) / (1 - (30675 + 5283) / 57073)
=0.41624868 / 0.36996478
=1.1251

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
=19743 / 18086
=1.0916

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))
=(1115 / (1115 + 5283)) / (2011 / (2011 + 5267))
=0.17427321 / 0.27631217
=0.6307

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)
=(4893 / 19743) / (5033 / 18086)
=0.24783468 / 0.27828154
=0.8906

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)
=((30480 + 8551) / 70775) / ((27178 + 4843) / 57073)
=0.55148004 / 0.56105339
=0.9829

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
=(4885 - 0 - 7945) / 70775
=-0.0432

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 -2.72 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 1.00431.00410.97581.0310.9770.98811.00551.00981.0161.0124
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 1.03450.92651.0510.96451.10991.0331.01421.0880.96590.9982
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 -2.45-2.46-2.92-2.76-2.75-2.70-2.58-2.56-2.72-2.28

Amgen Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93020.90890.78470.77180.91950.92090.99020.91560.91520.808
GMI 1.00921.01221.0161.01361.01851.01621.01241.02961.03791.0523
AQI 0.97130.90391.00820.991.01671.17481.54441.45581.27941.1251
SGI 1.07311.08851.1081.09611.07391.07551.08171.08621.10211.0916
DEPI 0.98320.9860.96430.94050.93390.95620.87520.77970.70570.6307
SGAI 1.01290.96120.96590.98140.98621.00880.99820.9520.91070.8906
LVGI 1.46271.39251.07031.01310.94960.96050.95731.00161.02040.9829
TATA -0.0395-0.039-0.0283-0.0264-0.0113-0.0074-0.0183-0.0248-0.0288-0.0432
M-score -2.83-2.82-2.72-2.73-2.51-2.43-2.28-2.41-2.49-2.72
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK