Switch to:
GlaxoSmithKline PLC (NYSE:GSK)
Beneish M-Score
-2.50 (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 -2.53 suggests that the company is not a manipulator.

GSK' s 10-Year Beneish M-Score Range
Min: -4.21   Max: 1.07
Current: -2.5

-4.21
1.07

During the past 13 years, the highest Beneish M-Score of GlaxoSmithKline PLC was 1.07. The lowest was -4.21. And the median was -2.67.


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 * 1.0438+0.528 * 1.0348+0.404 * 0.898+0.892 * 0.9527+0.115 * 2.2704
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0809+4.679 * -0.0305-0.327 * 1.0344
=-2.53

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $8,336 Mil.
Revenue was 9077.17041801 + 9489.76109215 + 9402.01005025 + 11377.2652389 = $39,346 Mil.
Gross Profit was 6136.65594855 + 6551.19453925 + 6482.4120603 + 7215.815486 = $26,386 Mil.
Total Current Assets was $23,892 Mil.
Total Assets was $64,796 Mil.
Property, Plant and Equipment(Net PPE) was $14,193 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,517 Mil.
Selling, General & Admin. Expense(SGA) was $13,669 Mil.
Total Current Liabilities was $24,550 Mil.
Long-Term Debt was $21,895 Mil.
Net Income was 644.694533762 + 1116.04095563 + 1118.9279732 + 4054.36573311 = $6,934 Mil.
Non Operating Income was 16.077170418 + 13.6518771331 + 1.67504187605 + 370.675453048 = $402 Mil.
Cash Flow from Operations was 2046.62379421 + 1307.16723549 + 1552.7638191 + 3602.96540362 = $8,510 Mil.
Accounts Receivable was $8,383 Mil.
Revenue was 10483.0917874 + 10042.4886191 + 9909.64777948 + 10865.8146965 = $41,301 Mil.
Gross Profit was 7083.73590982 + 7050.07587253 + 6883.61408882 + 7642.17252396 = $28,660 Mil.
Total Current Assets was $21,694 Mil.
Total Assets was $66,200 Mil.
Property, Plant and Equipment(Net PPE) was $14,116 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,964 Mil.
Selling, General & Admin. Expense(SGA) was $13,275 Mil.
Total Current Liabilities was $20,663 Mil.
Long-Term Debt was $25,209 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)
=(8336.01286174 / 39346.2067993) / (8383.25281804 / 41301.0428825)
=0.21186319 / 0.2029792
=1.0438

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)
=(6551.19453925 / 41301.0428825) / (6136.65594855 / 39346.2067993)
=0.69391948 / 0.67061301
=1.0348

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 - (23892.2829582 + 14192.926045) / 64795.8199357) / (1 - (21694.041868 + 14115.942029) / 66199.6779388)
=0.41222738 / 0.45906106
=0.898

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
=39346.2067993 / 41301.0428825
=0.9527

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))
=(3963.94715455 / (3963.94715455 + 14115.942029)) / (1517.04852324 / (1517.04852324 + 14192.926045))
=0.21924621 / 0.09656594
=2.2704

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)
=(13669.050089 / 39346.2067993) / (13274.7652377 / 41301.0428825)
=0.34740452 / 0.32141477
=1.0809

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)
=((21895.4983923 + 24549.8392283) / 64795.8199357) / ((25209.3397746 + 20663.4460548) / 66199.6779388)
=0.71679528 / 0.69294576
=1.0344

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
=(6934.02919571 - 402.079542475 - 8509.52025243) / 64795.8199357
=-0.0305

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 -2.53 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.

GlaxoSmithKline PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.28530.91440.92111.28971.06360.88950.89160.99790.76470.9611
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 -2.49-2.78-2.17-2.48-2.94-2.55-3.21-2.66-2.63-2.72

GlaxoSmithKline PLC Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.93621.02080.78830.99351.01810.94550.99991.02691.04551.0438
GMI 0.99941.0041.02941.04511.02351.01551.0371.02731.03621.0348
AQI 0.97811.15611.16481.17371.21.01060.93240.97190.91620.898
SGI 0.97590.95120.96310.95010.96650.98260.9940.99890.98650.9527
DEPI 0.97011.31361.01260.9080.69460.47111.09281.23911.54922.2704
SGAI 0.81660.86731.06941.06351.05540.97710.96150.98211.01021.0809
LVGI 1.03111.02291.03671.0511.00251.0271.0080.9971.00671.0344
TATA -0.03640.0080.0042-0.0097-0.0145-0.0748-0.0468-0.0485-0.0357-0.0305
M-score -2.72-2.35-2.63-2.52-2.51-2.95-2.70-2.65-2.57-2.53
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