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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.
GlaxoSmithKline PLC has a M-score of -2.65 suggests that the company is not a manipulator.
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.
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|
|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
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)|
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)|
|=||(7215.815486 / 41350.1548527)||/||(6482.4120603 / 41304.8556957)|
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 - (22185.9296482 + 14745.3936348) / 66510.8877722)||/||(1 - (21618.6830015 + 14007.6569678) / 65684.532925)|
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))|
|=||(2774.48900694 / (2774.48900694 + 14007.6569678))||/||(2270.23831794 / (2270.23831794 + 14745.3936348))|
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)|
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)|
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|
|=||(8319.41614332 - 449.52300292||-||11096.6928161)||/||66510.8877722|
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.
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
GlaxoSmithKline PLC Annual Data
GlaxoSmithKline PLC Quarterly Data