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Amgen Inc (NAS:AMGN)
Beneish M-Score
-2.70 (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 -2.70 suggests that the company is not a manipulator.

AMGN' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 0.34
Current: -2.7

-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 * 0.9339+0.528 * 1.0221+0.404 * 0.8385+0.892 * 1.0852+0.115 * 0.7626
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8581+4.679 * -0.044-0.327 * 0.9319
=-2.70

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,548 Mil.
Revenue was 5033 + 5331 + 5031 + 5180 = $20,575 Mil.
Gross Profit was 4000 + 4148 + 3963 + 4099 = $16,210 Mil.
Total Current Assets was $35,064 Mil.
Total Assets was $68,952 Mil.
Property, Plant and Equipment(Net PPE) was $5,123 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,098 Mil.
Selling, General & Admin. Expense(SGA) was $4,702 Mil.
Total Current Liabilities was $6,336 Mil.
Long-Term Debt was $29,841 Mil.
Net Income was 1623 + 1294 + 1244 + 1547 = $5,708 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 1329 + 2445 + 2741 + 2227 = $8,742 Mil.
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.



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)
=(2548 / 20575) / (2514 / 18959)
=0.12383961 / 0.13260193
=0.9339

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)
=(4148 / 18959) / (4000 / 20575)
=0.80526399 / 0.78784933
=1.0221

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 - (35064 + 5123) / 68952) / (1 - (28302 + 5365) / 67004)
=0.41717427 / 0.49753746
=0.8385

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
=20575 / 18959
=1.0852

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))
=(1527 / (1527 + 5365)) / (2098 / (2098 + 5123))
=0.22156123 / 0.29054148
=0.7626

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)
=(4702 / 20575) / (5049 / 18959)
=0.22852977 / 0.26631151
=0.8581

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)
=((29841 + 6336) / 68952) / ((29519 + 8203) / 67004)
=0.52466934 / 0.56298131
=0.9319

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
=(5708 - 0 - 8742) / 68952
=-0.044

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 -2.70 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 1.00410.97581.0310.9770.98811.00551.00981.03620.99251.0529
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 0.92651.0510.96451.10991.0331.01421.0880.96850.99550.8438
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 -2.46-2.92-2.76-2.75-2.70-2.58-2.56-2.71-2.29-2.79

Amgen Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.77180.91950.92090.99020.91560.91520.8080.87880.93390.9656
GMI 1.02311.01791.00570.99251.01471.0281.04731.05291.02211.0072
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 0.94050.93390.95620.87520.77970.70570.63070.67770.76261.028
SGAI 0.98280.98631.00720.99550.950.90940.89010.84380.85810.8986
LVGI 1.01310.94960.96050.95731.00161.02040.98290.94940.93190.9487
TATA -0.0264-0.0113-0.0074-0.0183-0.0248-0.0288-0.0432-0.0492-0.044-0.0098
M-score -2.73-2.51-2.44-2.29-2.42-2.50-2.72-2.79-2.70-2.48
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