Switch to:

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1356

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1361

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1356

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1361

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1356

Warning: Division by zero in /home/gurufocu/public_html/term.php on line 1361
GlaxoSmithKline PLC (NYSE:GSK)
Beneish M-Score
-2.65 (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.

GlaxoSmithKline PLC has a M-score of -2.65 suggests that the company is not a manipulator.

GSK' s 10-Year Beneish M-Score Range
Min: -4.26   Max: 1.07
Current: -2.65

-4.26
1.07

During the past 13 years, the highest Beneish M-Score of GlaxoSmithKline PLC was 1.07. The lowest was -4.26. 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 GlaxoSmithKline PLC 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 * 1.0279+0.528 * 1.0273+0.404 * 0.9719+0.892 * 0.9989+0.115 * 1.2391
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9821+4.679 * -0.0485-0.327 * 0.997
=-2.65

* 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 $9,090 Mil.
Revenue was 9402.01005025 + 11377.2652389 + 10483.0917874 + 10042.4886191 = $41,305 Mil.
Gross Profit was 6482.4120603 + 7215.815486 + 7083.73590982 + 7050.07587253 = $27,832 Mil.
Total Current Assets was $22,186 Mil.
Total Assets was $66,511 Mil.
Property, Plant and Equipment(Net PPE) was $14,745 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,270 Mil.
Selling, General & Admin. Expense(SGA) was $13,483 Mil.
Total Current Liabilities was $19,543 Mil.
Long-Term Debt was $25,765 Mil.
Net Income was 1118.9279732 + 4054.36573311 + 1560.38647343 + 1585.73596358 = $8,319 Mil.
Non Operating Income was 1.67504187605 + 370.675453048 + 22.5442834138 + 54.6282245827 = $450 Mil.
Cash Flow from Operations was 1552.7638191 + 3602.96540362 + 3344.60547504 + 2596.35811836 = $11,097 Mil.
Accounts Receivable was $8,853 Mil.
Revenue was 9909.64777948 + 10865.8146965 + 10493.5691318 + 10081.1232449 = $41,350 Mil.
Gross Profit was 6883.61408882 + 7642.17252396 + 7135.04823151 + 6960.99843994 = $28,622 Mil.
Total Current Assets was $21,619 Mil.
Total Assets was $65,685 Mil.
Property, Plant and Equipment(Net PPE) was $14,008 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,774 Mil.
Selling, General & Admin. Expense(SGA) was $13,744 Mil.
Total Current Liabilities was $18,389 Mil.
Long-Term Debt was $26,490 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)
=(9090.45226131 / 41304.8556957) / (8852.98621746 / 41350.1548527)
=0.22008193 / 0.21409802
=1.0279

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)
=(7215.815486 / 41350.1548527) / (6482.4120603 / 41304.8556957)
=0.69218201 / 0.67382004
=1.0273

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 - (22185.9296482 + 14745.3936348) / 66510.8877722) / (1 - (21618.6830015 + 14007.6569678) / 65684.532925)
=0.44473267 / 0.45761447
=0.9719

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
=41304.8556957 / 41350.1548527
=0.9989

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))
=(2774.48900694 / (2774.48900694 + 14007.6569678)) / (2270.23831794 / (2270.23831794 + 14745.3936348))
=0.16532385 / 0.13342075
=1.2391

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)
=(13483.4074794 / 41304.8556957) / (13744.2400945 / 41350.1548527)
=0.32643638 / 0.33238667
=0.9821

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)
=((25765.4941374 + 19542.7135678) / 66510.8877722) / ((26490.0459418 + 18388.9739663) / 65684.532925)
=0.6812149 / 0.68325096
=0.997

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
=(8319.41614332 - 449.52300292 - 11096.6928161) / 66510.8877722
=-0.0485

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.

GlaxoSmithKline PLC has a M-score of -2.65 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.

GlaxoSmithKline PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.00330.99991.02081.07551.06520.88670.89221.00340.92631.0406
GMI 1.0081.00230.99461.01751.04650.99561.0251.00151.02941.0356
AQI 1.25671.05311.10211.03211.0251.17551.09350.9691.16480.9324
SGI 0.9611.02071.18780.98320.78621.30230.97720.94960.99281.0342
DEPI 0.96761.01770.98471.05111.02430.790.91231.11910.98961.0284
SGAI 1.0190.9290.93360.96031.04771.07551.32780.69211.07010.9621
LVGI 1.10540.96250.86671.19231.14120.97931.04131.01351.03671.008
TATA -0.0654-0.0620.0262-0.0475-0.0673-0.0581-0.1244-0.03870.0037-0.0492
M-score -2.75-2.70-2.08-2.68-2.94-2.55-3.21-2.65-2.48-2.64

GlaxoSmithKline PLC Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.96410.95510.94081.02380.95490.99721.01990.94761.08261.0279
GMI 1.00080.99060.99941.0041.02941.04511.02351.01551.0371.0273
AQI 0.9690.99070.97811.15611.16481.17371.21.01060.93240.9719
SGI 0.98830.99620.97590.95120.96310.95010.96650.98260.9940.9989
DEPI 1.08310.83280.97011.31361.01260.9080.69460.47111.09281.2391
SGAI 0.69320.69580.81660.86731.06941.06351.05540.97710.96150.9821
LVGI 1.01350.99071.03111.02291.03671.0511.00251.0271.0080.997
TATA -0.0391-0.0296-0.03640.0080.0042-0.0097-0.0145-0.0748-0.0468-0.0485
M-score -2.66-2.64-2.72-2.35-2.48-2.52-2.51-2.95-2.62-2.65
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide