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Array BioPharma Inc (NAS:ARRY)
Beneish M-Score
-17.92 (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.

Array BioPharma Inc has a M-score of -17.92 suggests that the company is not a manipulator.

ARRY' s 10-Year Beneish M-Score Range
Min: -17.92   Max: 349.55
Current: -17.92

-17.92
349.55

During the past 13 years, the highest Beneish M-Score of Array BioPharma Inc was 349.55. The lowest was -17.92. And the median was -2.65.


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 Array BioPharma 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 * 1.1628+0.528 * -25.4678+0.404 * 0.4574+0.892 * 0.7347+0.115 * 1.047
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7031+4.679 * -0.2152-0.327 * 1.1171
=-17.92

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $4.88 Mil.
Revenue was 26.919 + 6.069 + 6.011 + 7.773 = $46.77 Mil.
Gross Profit was 13.821 + -6.108 + -5.43 + -2.983 = $-0.70 Mil.
Total Current Assets was $150.75 Mil.
Total Assets was $163.65 Mil.
Property, Plant and Equipment(Net PPE) was $8.07 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.96 Mil.
Selling, General & Admin. Expense(SGA) was $26.13 Mil.
Total Current Liabilities was $67.94 Mil.
Long-Term Debt was $106.61 Mil.
Net Income was -8.611 + -27.593 + -28.237 + -24.932 = $-89.37 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 1.986 + -18.769 + -22.238 + -15.129 = $-54.15 Mil.
Accounts Receivable was $5.71 Mil.
Revenue was 14.066 + 14.228 + 25.415 + 9.955 = $63.66 Mil.
Gross Profit was 0.956 + 3.57 + 18.409 + 1.331 = $24.27 Mil.
Total Current Assets was $128.47 Mil.
Total Assets was $146.32 Mil.
Property, Plant and Equipment(Net PPE) was $8.42 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.43 Mil.
Selling, General & Admin. Expense(SGA) was $20.89 Mil.
Total Current Liabilities was $38.28 Mil.
Long-Term Debt was $101.43 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)
=(4.878 / 46.772) / (5.71 / 63.664)
=0.10429317 / 0.08968962
=1.1628

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)
=(-6.108 / 63.664) / (13.821 / 46.772)
=0.38115733 / -0.01496622
=-25.4678

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 - (150.754 + 8.072) / 163.648) / (1 - (128.473 + 8.421) / 146.321)
=0.02946568 / 0.06442684
=0.4574

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
=46.772 / 63.664
=0.7347

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))
=(4.425 / (4.425 + 8.421)) / (3.958 / (3.958 + 8.072))
=0.3444652 / 0.32901081
=1.047

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)
=(26.133 / 46.772) / (20.886 / 63.664)
=0.55873172 / 0.3280661
=1.7031

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)
=((106.607 + 67.939) / 163.648) / ((101.43 + 38.278) / 146.321)
=1.06659415 / 0.95480485
=1.1171

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
=(-89.373 - 0 - -54.15) / 163.648
=-0.2152

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.

Array BioPharma Inc has a M-score of -17.92 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.

Array BioPharma Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 0.48192.0209240.9641011110.92090.9356
GMI -0.4251.36771.25971.25910.43270.79340.83611.2595-6.1458
AQI 0.0369023.0071.26090.5170.2710.7721.26581.9475
SGI 1.30650.98890.77920.86722.15681.33451.18410.81730.6047
DEPI 0.93720.82110.97750.94830.87450.69911.10270.98060.849
SGAI 0.89491.48771.46651.33280.44050.71170.78961.57951.846
LVGI 0.88381.58181.89172.91330.96161.50510.86210.70751.0243
TATA -0.0474-0.1499-0.2985-0.1803-0.60620.15760.10090.2671-0.0976
M-score -4.00-2.76225.35-4.81-4.68-2.00-1.937.97-6.91

Array BioPharma Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 11110.92111110.935611.85821.1628
GMI 0.9091.03631.26571.25951.39071.70171.6873-6.1458-1.2425-25.4678
AQI 1.14630.55880.95091.26581.82612.9032.88641.94750.57780.4574
SGI 1.04390.89960.77620.81730.86220.86050.94840.60470.4990.7347
DEPI 1.13861.15911.18920.98060.91930.85880.80970.8490.90121.047
SGAI 0.99141.21871.61811.57961.42811.42031.191.84592.35461.7031
LVGI 1.02890.54461.00260.70750.53260.8470.78981.02431.20021.1171
TATA 0.440.31320.2940.26710.07960.07160.0004-0.0976-0.0579-0.2152
M-score -0.36-1.13-1.277.97-1.62-1.17-1.38-6.915.13-17.92
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