Switch to:
Horizon Pharma PLC (NAS:HZNP)
Beneish M-Score
-1.37 (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.

Horizon Pharma PLC has a M-score of -1.37 signals that the company is a manipulator.

HZNP' s Beneish M-Score Range Over the Past 10 Years
Min: -17.04   Max: 8.78
Current: -1.37

-17.04
8.78

During the past 8 years, the highest Beneish M-Score of Horizon Pharma PLC was 8.78. The lowest was -17.04. And the median was -0.01.


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 Horizon Pharma 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 * 0.9627+0.528 * 1.0534+0.404 * 1.4067+0.892 * 2.3692+0.115 * 0.9326
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8851+4.679 * -0.0622-0.327 * 0.9856
=-1.37

* 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 $290.3 Mil.
Revenue was 204.69 + 244.538 + 226.544 + 172.821 = $848.6 Mil.
Gross Profit was 127.457 + 176.965 + 165.294 + 110.995 = $580.7 Mil.
Total Current Assets was $876.6 Mil.
Total Assets was $3,205.5 Mil.
Property, Plant and Equipment(Net PPE) was $18.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $170.7 Mil.
Selling, General & Admin. Expense(SGA) was $508.9 Mil.
Total Current Liabilities was $442.9 Mil.
Long-Term Debt was $1,136.2 Mil.
Net Income was -45.406 + 23.994 + 3.277 + 31.814 = $13.7 Mil.
Non Operating Income was -0.187 + -29.391 + -0.176 + -76.245 = $-106.0 Mil.
Cash Flow from Operations was 54.181 + 134.938 + 88.383 + 41.584 = $319.1 Mil.
Accounts Receivable was $127.3 Mil.
Revenue was 113.141 + 103.841 + 75.126 + 66.062 = $358.2 Mil.
Gross Profit was 84.288 + 71.161 + 61.482 + 41.252 = $258.2 Mil.
Total Current Assets was $735.9 Mil.
Total Assets was $1,527.3 Mil.
Property, Plant and Equipment(Net PPE) was $8.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $46.9 Mil.
Selling, General & Admin. Expense(SGA) was $242.7 Mil.
Total Current Liabilities was $196.4 Mil.
Long-Term Debt was $566.9 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)
=(290.289 / 848.593) / (127.265 / 358.17)
=0.34208272 / 0.3553201
=0.9627

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)
=(176.965 / 358.17) / (127.457 / 848.593)
=0.72083927 / 0.68432217
=1.0534

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 - (876.604 + 18.581) / 3205.494) / (1 - (735.925 + 8.873) / 1527.296)
=0.72073415 / 0.51234207
=1.4067

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
=848.593 / 358.17
=2.3692

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))
=(46.941 / (46.941 + 8.873)) / (170.65 / (170.65 + 18.581))
=0.84102555 / 0.90180784
=0.9326

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)
=(508.901 / 848.593) / (242.689 / 358.17)
=0.59969974 / 0.67758048
=0.8851

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)
=((1136.18 + 442.924) / 3205.494) / ((566.914 + 196.438) / 1527.296)
=0.49262423 / 0.49980619
=0.9856

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
=(13.679 - -105.999 - 319.086) / 3205.494
=-0.0622

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.

Horizon Pharma PLC has a M-score of -1.37 signals that the company is likely to 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.

Horizon Pharma PLC Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.4150.51511.22231.15451.1168
GMI 16.1805-0.13830.44241.0921.0348
AQI 0.76490.5251.44551.2920.899
SGI 2.91542.83413.77024.0122.5494
DEPI 1.14030.94350.84060.86270.908
SGAI 0.50130.68930.35420.56590.8255
LVGI 1.78360.96581.60320.74641.0733
TATA -0.6995-0.0597-0.1054-0.0474-0.0119
M-score 4.10-2.30-0.520.44-1.07

Horizon Pharma PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.22231.17971.43511.18911.15451.03471.29540.98391.11680.9627
GMI 0.44240.51450.71860.87771.0921.17351.09121.11791.03481.0534
AQI 1.44551.08430.89411.5521.2921.15681.79261.0050.8991.4067
SGI 3.77024.44334.91684.03544.0123.06732.72562.80812.54942.3692
DEPI 0.84060.82860.84140.83810.86270.91140.90760.89650.9080.9326
SGAI 0.35420.33650.33740.53210.56590.71420.91290.72630.82550.8851
LVGI 1.60321.43031.30691.07260.74640.82020.77740.95451.07330.9856
TATA -0.1054-0.0966-0.1518-0.0607-0.04740.00690.0360.0122-0.0119-0.0622
M-score -0.520.040.510.310.44-0.32-0.06-0.71-1.07-1.37
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)
FEEDBACK