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Novo Nordisk A/S (NYSE:NVO)
Beneish M-Score
-2.42 (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.

Novo Nordisk A/S has a M-score of -2.39 suggests that the company is not a manipulator.

NVO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.35   Max: -0.58
Current: -2.42

-3.35
-0.58

During the past 13 years, the highest Beneish M-Score of Novo Nordisk A/S was -0.58. The lowest was -3.35. And the median was -2.72.


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 Novo Nordisk A/S 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 * 1.099+0.528 * 0.9885+0.404 * 0.9039+0.892 * 1.0552+0.115 * 1.4332
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0006+4.679 * -0.0172-0.327 * 0.9199
=-2.39

* 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 $2,463 Mil.
Revenue was 4062.34138477 + 4213.62906756 + 4032.08572246 + 4071.47156184 = $16,380 Mil.
Gross Profit was 3430.26901144 + 3541.22282212 + 3453.12805695 + 3490.8215468 = $13,915 Mil.
Total Current Assets was $6,924 Mil.
Total Assets was $12,296 Mil.
Property, Plant and Equipment(Net PPE) was $3,861 Mil.
Depreciation, Depletion and Amortization(DDA) was $434 Mil.
Selling, General & Admin. Expense(SGA) was $4,887 Mil.
Total Current Liabilities was $6,132 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1411.48896784 + 1205.0196994 + 1261.60699505 + 1255.34155883 = $5,133 Mil.
Non Operating Income was 0 + -868.232890705 + 0 + 0 = $-868 Mil.
Cash Flow from Operations was 1115.90481593 + 1476.57960018 + 1819.19424504 + 1801.6852242 = $6,213 Mil.
Accounts Receivable was $2,124 Mil.
Revenue was 3654.61031992 + 4073.66903614 + 3852.17376249 + 3942.50925065 = $15,523 Mil.
Gross Profit was 3092.78649534 + 3411.0453845 + 3258.99890922 + 3273.36359162 = $13,036 Mil.
Total Current Assets was $6,303 Mil.
Total Assets was $11,233 Mil.
Property, Plant and Equipment(Net PPE) was $3,403 Mil.
Depreciation, Depletion and Amortization(DDA) was $576 Mil.
Selling, General & Admin. Expense(SGA) was $4,629 Mil.
Total Current Liabilities was $6,089 Mil.
Long-Term Debt was $0 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)
=(2463.49983579 / 16379.5277366) / (2124.31476057 / 15522.9623692)
=0.15040115 / 0.13684983
=1.099

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)
=(13036.1943807 / 15522.9623692) / (13915.4414373 / 16379.5277366)
=0.83980068 / 0.84956304
=0.9885

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 - (6923.98411608 + 3860.95602066) / 12296.3007196) / (1 - (6302.8975839 + 3402.84827566) / 11233.1409345)
=0.12291181 / 0.13597222
=0.9039

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
=16379.5277366 / 15522.9623692
=1.0552

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))
=(576.321837001 / (576.321837001 + 3402.84827566)) / (434.030261509 / (434.030261509 + 3860.95602066))
=0.14483468 / 0.1010551
=1.4332

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)
=(4887.22536264 / 16379.5277366) / (4628.98509994 / 15522.9623692)
=0.29837401 / 0.29820243
=1.0006

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)
=((0 + 6131.729018) / 12296.3007196) / ((0 + 6089.42193346) / 11233.1409345)
=0.49866453 / 0.54209432
=0.9199

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
=(5133.45722113 - -868.232890705 - 6213.36388534) / 12296.3007196
=-0.0172

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.

Novo Nordisk A/S has a M-score of -2.39 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.

Novo Nordisk A/S Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.93911.09280.99160.95741.01141.00750.87671.05651.12520.977
GMI 0.96750.98260.98430.97790.98490.9970.97920.99590.99380.9835
AQI 1.33911.02240.71450.90921.12681.10030.93591.50551.08911.2223
SGI 1.27961.19091.01121.21011.07781.08881.1691.11910.95821.0703
DEPI 0.92760.71571.14750.98961.09090.92861.04060.980.87721.2453
SGAI 1.03240.98460.97431.02750.98260.95870.94991.010.93660.9892
LVGI 0.89940.95861.1330.9541.17631.06411.00171.04531.26931.0185
TATA -0.0282-0.0731-0.0624-0.0832-0.1034-0.066-0.0322-0.0256-0.06170.0275
M-score -2.28-2.58-2.92-2.76-2.88-2.69-2.62-2.26-2.75-2.20

Novo Nordisk A/S Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.96311.00851.01031.02861.07231.00051.07111.02381.099
GMI 0.99580.99820.9940.99420.99220.98370.98580.98320.9885
AQI 1.40211.22531.33821.08911.2591.111.08551.22230.9039
SGI 1.09671.06971.06381.04821.02031.01811.01811.02141.0552
DEPI 00000.20110.42250.93991.29311.4332
SGAI 0.98890.97320.96660.93450.94630.96320.960.99061.0006
LVGI 1.01720.94311.11871.26931.29871.27271.07331.01850.9199
TATA 0.02680.0177-0.0662-0.0628-0.0363-0.0611-0.02490.0246-0.0172
M-score -2.26-2.33-2.74-2.86-2.65-2.86-2.51-2.21-2.39
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