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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.
During the past 13 years, the highest Beneish M-Score of Biomarin Pharmaceutical Inc was 7.17. The lowest was -5.36. And the median was -1.95.
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 Biomarin Pharmaceutical 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 * 1.1077||+||0.528 * 1.0026||+||0.404 * 1.8305||+||0.892 * 1.3738||+||0.115 * 0.9741|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0247||+||4.679 * -0.0026||-||0.327 * 0.7935|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $186.1 Mil.|
Revenue was 250.523 + 203.264 + 230.854 + 176.847 = $861.5 Mil.
Gross Profit was 210.645 + 170.451 + 185.036 + 146.927 = $713.1 Mil.
Total Current Assets was $1,213.9 Mil.
Total Assets was $3,648.7 Mil.
Property, Plant and Equipment(Net PPE) was $568.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $60.6 Mil.
Selling, General & Admin. Expense(SGA) was $368.6 Mil.
Total Current Liabilities was $347.7 Mil.
Long-Term Debt was $661.5 Mil.
Net Income was -81.989 + -67.501 + -69.797 + 7.445 = $-211.8 Mil.
Non Operating Income was -9.325 + -7.026 + 0.572 + -0.299 = $-16.1 Mil.
Cash Flow from Operations was -12.991 + -137.811 + -26.777 + -8.804 = $-186.4 Mil.
|Accounts Receivable was $122.3 Mil.
Revenue was 191.787 + 151.552 + 146.873 + 136.874 = $627.1 Mil.
Gross Profit was 160.577 + 128.736 + 122.252 + 108.82 = $520.4 Mil.
Total Current Assets was $1,220.2 Mil.
Total Assets was $2,345.7 Mil.
Property, Plant and Equipment(Net PPE) was $469.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.7 Mil.
Selling, General & Admin. Expense(SGA) was $261.8 Mil.
Total Current Liabilities was $166.7 Mil.
Long-Term Debt was $650.9 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(186.083 / 861.488)||/||(122.282 / 627.086)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(170.451 / 627.086)||/||(210.645 / 861.488)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1213.929 + 568.051) / 3648.689)||/||(1 - (1220.227 + 469.862) / 2345.685)|
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.
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))|
|=||(48.728 / (48.728 + 469.862))||/||(60.643 / (60.643 + 568.051))|
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)|
|=||(368.556 / 861.488)||/||(261.808 / 627.086)|
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)|
|=||((661.492 + 347.704) / 3648.689)||/||((650.872 + 166.72) / 2345.685)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-211.842 - -16.078||-||-186.383)||/||3648.689|
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.
Biomarin Pharmaceutical Inc has a M-score of -1.66 signals that the company is likely to be a manipulator.
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
Biomarin Pharmaceutical Inc Annual Data
Biomarin Pharmaceutical Inc Quarterly Data