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ISIS Pharmaceuticals Inc (NAS:ISIS)
Beneish M-Score
-3.20 (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.

ISIS Pharmaceuticals Inc has a M-score of -3.20 suggests that the company is not a manipulator.

ISIS' s 10-Year Beneish M-Score Range
Min: -4.14   Max: 9.57
Current: -3.2

-4.14
9.57

During the past 13 years, the highest Beneish M-Score of ISIS Pharmaceuticals Inc was 9.57. The lowest was -4.14. And the median was -2.60.


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 ISIS Pharmaceuticals Inc 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 * 0.2418+0.528 * 1+0.404 * 1.0537+0.892 * 1.454+0.115 * 1.066
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9284+4.679 * -0.0608-0.327 * 1.5505
=-3.20

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $3.9 Mil.
Revenue was 84.861 + 44.063 + 57.076 + 28.161 = $214.2 Mil.
Gross Profit was 84.861 + 44.063 + 57.076 + 28.161 = $214.2 Mil.
Total Current Assets was $836.6 Mil.
Total Assets was $955.8 Mil.
Property, Plant and Equipment(Net PPE) was $89.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.4 Mil.
Selling, General & Admin. Expense(SGA) was $20.1 Mil.
Total Current Liabilities was $115.3 Mil.
Long-Term Debt was $454.9 Mil.
Net Income was 31.053 + -26.676 + -12.081 + -31.28 = $-39.0 Mil.
Non Operating Income was 12.191 + 0.538 + -0.26 + 0.397 = $12.9 Mil.
Cash Flow from Operations was 70.684 + 1.944 + -34.015 + -32.328 = $6.3 Mil.
Accounts Receivable was $11.1 Mil.
Revenue was 42.249 + 23.585 + 38.092 + 43.36 = $147.3 Mil.
Gross Profit was 42.249 + 23.585 + 38.092 + 43.36 = $147.3 Mil.
Total Current Assets was $735.5 Mil.
Total Assets was $847.2 Mil.
Property, Plant and Equipment(Net PPE) was $86.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $9.8 Mil.
Selling, General & Admin. Expense(SGA) was $14.9 Mil.
Total Current Liabilities was $97.8 Mil.
Long-Term Debt was $228.2 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)
=(3.903 / 214.161) / (11.102 / 147.286)
=0.01822461 / 0.07537716
=0.2418

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)
=(44.063 / 147.286) / (84.861 / 214.161)
=1 / 1
=1

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 - (836.597 + 88.958) / 955.809) / (1 - (735.51 + 86.198) / 847.156)
=0.03165277 / 0.03003933
=1.0537

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
=214.161 / 147.286
=1.454

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))
=(9.782 / (9.782 + 86.198)) / (9.404 / (9.404 + 88.958))
=0.10191707 / 0.09560603
=1.066

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)
=(20.139 / 214.161) / (14.919 / 147.286)
=0.09403673 / 0.10129272
=0.9284

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)
=((454.9 + 115.332) / 955.809) / ((228.164 + 97.812) / 847.156)
=0.59659618 / 0.38478863
=1.5505

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
=(-38.984 - 12.866 - 6.285) / 955.809
=-0.0608

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.

ISIS Pharmaceuticals Inc has a M-score of -3.20 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.

ISIS Pharmaceuticals Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.41411.6510.65680.36312.33130.12776.10040.073214.7360.2418
GMI 1111111111
AQI 1.18420.53831.03190.38980.76731.12011.00980.98410.5261.0537
SGI 0.94160.37023.92651.83721.13440.8920.91351.02991.44331.4541
DEPI 0.5631.061.03131.72741.111.24171.8811.02941.03621.066
SGAI 0.87493.83570.29690.57560.92640.90121.19980.95020.82590.9285
LVGI 0.73240.62731.40860.59520.72921.22580.66920.90141.37891.5505
TATA -0.06830.0198-0.1831-0.39930.39780.00960.0547-0.1484-0.1493-0.0608
M-score -3.26-2.90-1.04-4.140.75-3.312.57-3.969.57-3.20

ISIS Pharmaceuticals Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.52020.07320.70381.42293.336914.73597.752415.48961.51520.2418
GMI 1111111111
AQI 1.06920.98410.95390.66990.54790.5260.54630.79110.87111.0537
SGI 1.23071.02991.20760.9131.09021.44331.08111.33781.37341.454
DEPI 0.75831.02940.85260.73540.65511.03621.30621.54291.78541.066
SGAI 0.89070.95020.84161.09970.9450.8261.13290.9640.9720.9284
LVGI 0.95880.90140.89410.66640.66491.37890.74551.02041.14121.5505
TATA -0.0479-0.1484-0.1028-0.1167-0.198-0.1493-0.1602-0.0951-0.0207-0.0608
M-score -1.99-3.96-3.02-2.79-1.289.572.9710.68-1.77-3.20
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