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Array BioPharma Inc (NAS:ARRY)
Beneish M-Score
-1.39 (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 -1.38 signals that the company is a manipulator.

ARRY' s 10-Year Beneish M-Score Range
Min: -10.6   Max: 349.55
Current: -1.39

-10.6
349.55

During the past 13 years, the highest Beneish M-Score of Array BioPharma Inc was 349.55. The lowest was -10.60. 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 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+0.528 * 1.6873+0.404 * 2.8864+0.892 * 0.9484+0.115 * 0.8097
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.19+4.679 * 0.0004-0.327 * 0.7898
=-1.38

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $4.43 Mil.
Revenue was 7.773 + 14.066 + 14.228 + 25.415 = $61.48 Mil.
Gross Profit was -2.983 + 0.956 + 3.57 + 18.409 = $19.95 Mil.
Total Current Assets was $118.07 Mil.
Total Assets was $135.16 Mil.
Property, Plant and Equipment(Net PPE) was $7.84 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.58 Mil.
Selling, General & Admin. Expense(SGA) was $21.29 Mil.
Total Current Liabilities was $45.86 Mil.
Long-Term Debt was $102.68 Mil.
Net Income was -24.932 + -16.408 + -15.68 + -17.651 = $-74.67 Mil.
Non Operating Income was 0 + 0 + 0 + -11.197 = $-11.20 Mil.
Cash Flow from Operations was -15.129 + -33.203 + -1.112 + -14.083 = $-63.53 Mil.
Accounts Receivable was $0.00 Mil.
Revenue was 9.955 + 18.377 + 15.833 + 20.664 = $64.83 Mil.
Gross Profit was 1.331 + 10.468 + 9.294 + 14.405 = $35.50 Mil.
Total Current Assets was $94.16 Mil.
Total Assets was $107.43 Mil.
Property, Plant and Equipment(Net PPE) was $10.72 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.56 Mil.
Selling, General & Admin. Expense(SGA) was $18.87 Mil.
Total Current Liabilities was $54.14 Mil.
Long-Term Debt was $95.35 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)
=(4.433 / 61.482) / (0 / 64.829)
=0.0721024 / 0
=1

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)
=(0.956 / 64.829) / (-2.983 / 61.482)
=0.54756359 / 0.32451775
=1.6873

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 - (118.068 + 7.838) / 135.155) / (1 - (94.164 + 10.72) / 107.431)
=0.06843254 / 0.02370824
=2.8864

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
=61.482 / 64.829
=0.9484

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))
=(4.561 / (4.561 + 10.72)) / (4.576 / (4.576 + 7.838))
=0.29847523 / 0.36861608
=0.8097

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)
=(21.29 / 61.482) / (18.865 / 64.829)
=0.34628021 / 0.29099631
=1.19

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)
=((102.675 + 45.864) / 135.155) / ((95.349 + 54.138) / 107.431)
=1.09902704 / 1.39146987
=0.7898

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
=(-74.671 - -11.197 - -63.527) / 135.155
=0.0004

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 -1.38 signals that the company is likely to 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 0.0369023.0071.2609-1.3607-0.1030.7721.2658-15.434
SGI 1.30650.98890.77920.86722.15681.33451.18410.81730.6047
DEPI 0.93720.82110.97750.94832.85230.21441.10270.98066.3661
SGAI 0.89491.48771.46651.33280.44050.71170.78961.57951.846
LVGI 0.88381.58181.89172.91330.56872.54470.86210.70751.0243
TATA -0.0474-0.1499-0.2985-0.1803-0.60620.15760.10090.2671-0.0976
M-score -4.00-2.76225.35-4.81-5.09-2.54-1.937.97-13.30

Array BioPharma Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1111110.92111110.9356
GMI 0.82160.83610.9091.03631.26571.25951.39071.70171.6873-6.1458
AQI 0.88360.7721.14630.55880.95091.26581.8261-21.96792.8864-15.434
SGI 1.17921.18411.04390.89960.77620.81730.86220.86050.94840.6047
DEPI 0.68211.10271.13861.15911.18920.98060.91936.25810.80976.3661
SGAI 0.78860.78960.99141.21871.61811.57961.42811.42031.191.8459
LVGI 0.82650.86211.02890.54461.00260.70750.53260.8470.78981.0243
TATA 0.03660.1010.440.31320.2940.26710.07960.07160.0004-0.0976
M-score -2.23-1.93-0.36-1.13-1.277.97-1.62-10.60-1.38-13.30
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