Switch to:
GlaxoSmithKline PLC (NYSE:GSK)
Beneish M-Score
-2.56 (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 -2.61 suggests that the company is not a manipulator.

GSK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.78   Max: 1.07
Current: -2.56

-3.78
1.07

During the past 13 years, the highest Beneish M-Score of GlaxoSmithKline PLC was 1.07. The lowest was -3.78. And the median was -2.69.


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 * 1.0162+0.528 * 1.046+0.404 * 1.1067+0.892 * 1.0044+0.115 * 0.793
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0176+4.679 * -0.0393-0.327 * 1.0186
=-2.61

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $8,563 Mil.
Revenue was 8873.21937322 + 9410.17964072 + 9397.2392638 + 9171.33956386 = $36,852 Mil.
Gross Profit was 5834.75783476 + 5606.28742515 + 6016.87116564 + 6048.28660436 = $23,506 Mil.
Total Current Assets was $22,548 Mil.
Total Assets was $77,605 Mil.
Property, Plant and Equipment(Net PPE) was $14,348 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,708 Mil.
Selling, General & Admin. Expense(SGA) was $13,834 Mil.
Total Current Liabilities was $19,828 Mil.
Long-Term Debt was $22,434 Mil.
Net Income was 401.709401709 + -529.94011976 + 825.153374233 + 232.087227414 = $929 Mil.
Non Operating Income was 0 + -55.3892215569 + -6.13496932515 + -1.55763239875 = $-63 Mil.
Cash Flow from Operations was 716.524216524 + 2247.00598802 + 737.73006135 + 338.00623053 = $4,039 Mil.
Accounts Receivable was $8,389 Mil.
Revenue was 8403.58744395 + 9680.75117371 + 9195.43973941 + 9409.47546531 = $36,689 Mil.
Gross Profit was 5260.0896861 + 6505.47730829 + 6216.61237785 + 6495.76988156 = $24,478 Mil.
Total Current Assets was $31,187 Mil.
Total Assets was $86,691 Mil.
Property, Plant and Equipment(Net PPE) was $14,413 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,076 Mil.
Selling, General & Admin. Expense(SGA) was $13,535 Mil.
Total Current Liabilities was $23,596 Mil.
Long-Term Debt was $22,752 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)
=(8562.67806268 / 36851.9778416) / (8388.63976084 / 36689.2538224)
=0.23235328 / 0.22864024
=1.0162

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)
=(5606.28742515 / 36689.2538224) / (5834.75783476 / 36851.9778416)
=0.66716945 / 0.63785458
=1.046

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 - (22548.4330484 + 14347.5783476) / 77605.4131054) / (1 - (31186.8460389 + 14412.5560538) / 86690.5829596)
=0.5245691 / 0.47399821
=1.1067

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
=36851.9778416 / 36689.2538224
=1.0044

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))
=(2076.08078563 / (2076.08078563 + 14412.5560538)) / (2708.20069009 / (2708.20069009 + 14347.5783476))
=0.12590979 / 0.15878493
=0.793

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)
=(13834.1034095 / 36851.9778416) / (13535.3525967 / 36689.2538224)
=0.3753965 / 0.36891872
=1.0176

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)
=((22434.4729345 + 19827.6353276) / 77605.4131054) / ((22751.8684604 + 23596.4125561) / 86690.5829596)
=0.54457681 / 0.53464032
=1.0186

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
=(929.009883596 - -63.0818232808 - 4039.26649643) / 77605.4131054
=-0.0393

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 -2.61 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.92111.28971.06360.88950.89160.99790.76470.96111.0331.0341
GMI 0.99461.01751.04650.99561.00991.00041.04411.03730.99181.0822
AQI 1.10211.03211.0251.17551.09350.9691.16480.93240.97391.2222
SGI 1.2071.0050.78931.27270.96180.96460.99941.01590.830.9947
DEPI 0.98471.05111.02430.790.91231.11910.98961.02840.9760.9763
SGAI 0.93360.96031.04771.07551.35970.7011.0260.96771.12031.0767
LVGI 0.86671.19231.14120.97931.04131.01351.03671.0081.03540.7503
TATA 0.0395-0.0237-0.0645-0.0581-0.1244-0.03870.0039-0.0492-0.05940.0941
M-score -2.09-2.35-2.93-2.57-3.24-2.65-2.61-2.73-2.93-1.81

GlaxoSmithKline PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.98611.03651.01421.05670.94961.04551.07771.16491.06341.0162
GMI 1.03671.0271.03631.03490.99041.01021.01741.03141.08191.046
AQI 0.93240.97190.91620.8980.97391.06581.15181.21221.22221.1067
SGI 0.99010.99750.97270.94890.90280.89010.90260.93430.96741.0044
DEPI 1.08241.24661.53522.32190.87831.06660.81790.70331.00370.793
SGAI 0.96180.98231.01021.08051.1211.12991.14981.08021.07651.0176
LVGI 1.0080.9971.00671.03441.03540.78480.76440.73160.75031.0186
TATA -0.047-0.0489-0.0356-0.0303-0.06090.07850.08190.10350.0939-0.0393
M-score -2.72-2.64-2.61-2.51-2.96-2.08-2.01-1.76-1.81-2.61
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)

GuruFocus Premium Plus Membership

FEEDBACK