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Array BioPharma Inc (NAS:ARRY)
Beneish M-Score
-6.53 (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 -6.53 suggests that the company is not a manipulator.

ARRY' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 10000000
Current: -6.53

-10000000
10000000

During the past 13 years, the highest Beneish M-Score of Array BioPharma Inc was 10000000.00. The lowest was -10000000.00. 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 * 0.6436+0.528 * -4.5448+0.404 * 0.3081+0.892 * 0.7417+0.115 * 1.1101
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.8312+4.679 * -0.0565-0.327 * 0.6674
=-6.53

* 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 $2.12 Mil.
Revenue was 6.601 + 26.919 + 6.069 + 6.011 = $45.60 Mil.
Gross Profit was -5.539 + 13.821 + -6.108 + -5.43 = $-3.26 Mil.
Total Current Assets was $196.60 Mil.
Total Assets was $208.45 Mil.
Property, Plant and Equipment(Net PPE) was $7.46 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.71 Mil.
Selling, General & Admin. Expense(SGA) was $28.92 Mil.
Total Current Liabilities was $44.92 Mil.
Long-Term Debt was $107.99 Mil.
Net Income was 58.307 + -8.611 + -27.593 + -28.237 = $-6.13 Mil.
Non Operating Income was 6.402 + 0 + 0 + 0 = $6.40 Mil.
Cash Flow from Operations was 38.255 + 1.986 + -18.769 + -22.238 = $-0.77 Mil.
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.



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)
=(2.116 / 45.6) / (4.433 / 61.482)
=0.04640351 / 0.0721024
=0.6436

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)
=(13.821 / 61.482) / (-5.539 / 45.6)
=0.32451775 / -0.07140351
=-4.5448

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 - (196.595 + 7.455) / 208.445) / (1 - (118.068 + 7.838) / 135.155)
=0.0210847 / 0.06843254
=0.3081

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
=45.6 / 61.482
=0.7417

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))
=(4.576 / (4.576 + 7.838)) / (3.706 / (3.706 + 7.455))
=0.36861608 / 0.3320491
=1.1101

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)
=(28.915 / 45.6) / (21.29 / 61.482)
=0.63410088 / 0.34628021
=1.8312

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)
=((107.985 + 44.917) / 208.445) / ((102.675 + 45.864) / 135.155)
=0.73353642 / 1.09902704
=0.6674

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
=(-6.134 - 6.402 - -0.766) / 208.445
=-0.0565

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 -6.53 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1110.92111110.935611.85821.16280.6436
GMI 1.03631.26571.25951.39071.70171.6873-6.1458-1.2425-25.4678-4.5448
AQI 0.55880.95091.26581.82612.9032.88641.94750.57780.45740.3081
SGI 0.89960.77620.81730.86220.86050.94840.60470.4990.73470.7417
DEPI 1.15911.18920.98060.91930.85880.80970.8490.90121.0471.1101
SGAI 1.21871.61811.57961.42811.42031.191.84592.35461.70311.8312
LVGI 0.54461.00260.70750.53260.8470.78981.02431.20021.11710.6674
TATA 0.31320.2940.26710.07960.07160.0004-0.0976-0.0579-0.2152-0.0565
M-score -1.13-1.277.97-1.62-1.17-1.38-6.915.13-17.92-6.53
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