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Novo Nordisk A/S (NYSE:NVO)
Beneish M-Score
-2.62 (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 -2.62 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: -2.62

-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 -2.71.


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 * 1.1443+0.528 * 1.0015+0.404 * 0.756+0.892 * 1.0467+0.115 * 1.1182
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9836+4.679 * -0.0458-0.327 * 1.0532
=-2.62

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $2,445 Mil.
Revenue was 4147.76321735 + 4147.25872225 + 4062.34138477 + 4213.62906756 = $16,571 Mil.
Gross Profit was 3547.37159211 + 3536.32381815 + 3430.26901144 + 3541.22282212 = $14,055 Mil.
Total Current Assets was $7,769 Mil.
Total Assets was $13,156 Mil.
Property, Plant and Equipment(Net PPE) was $4,251 Mil.
Depreciation, Depletion and Amortization(DDA) was $460 Mil.
Selling, General & Admin. Expense(SGA) was $4,840 Mil.
Total Current Liabilities was $6,265 Mil.
Long-Term Debt was $0 Mil.
Net Income was 1476.57779786 + 1505.51276242 + 1411.48896784 + 1205.0196994 = $5,599 Mil.
Non Operating Income was 0 + 0 + 0 + -868.232890705 = $-868 Mil.
Cash Flow from Operations was 2287.8445549 + 2189.54840659 + 1115.90481593 + 1476.57960018 = $7,070 Mil.
Accounts Receivable was $2,041 Mil.
Revenue was 4032.08572246 + 4071.47156184 + 3654.61031992 + 4073.66903614 = $15,832 Mil.
Gross Profit was 3453.12805695 + 3490.8215468 + 3092.78649534 + 3411.0453845 = $13,448 Mil.
Total Current Assets was $7,749 Mil.
Total Assets was $12,821 Mil.
Property, Plant and Equipment(Net PPE) was $3,608 Mil.
Depreciation, Depletion and Amortization(DDA) was $443 Mil.
Selling, General & Admin. Expense(SGA) was $4,701 Mil.
Total Current Liabilities was $5,798 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)
=(2445.09715319 / 16570.9923919) / (2041.47666561 / 15831.8366404)
=0.14755285 / 0.12894756
=1.1443

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)
=(13447.7814836 / 15831.8366404) / (14055.1872438 / 16570.9923919)
=0.84941386 / 0.84818018
=1.0015

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 - (7768.6398554 + 4251.09203193) / 13155.5957222) / (1 - (7748.73207218 + 3608.43980917) / 12821.4968321)
=0.08634074 / 0.11420858
=0.756

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
=16570.9923919 / 15831.8366404
=1.0467

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))
=(442.684337718 / (442.684337718 + 3608.43980917)) / (460.415978089 / (460.415978089 + 4251.09203193))
=0.10927444 / 0.09772157
=1.1182

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)
=(4839.97622349 / 16570.9923919) / (4701.23559009 / 15831.8366404)
=0.29207522 / 0.29694821
=0.9836

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 + 6264.7989155) / 13155.5957222) / ((0 + 5797.55293693) / 12821.4968321)
=0.47620792 / 0.45217442
=1.0532

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
=(5598.59922753 - -868.232890705 - 7069.87737759) / 13155.5957222
=-0.0458

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 -2.62 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 local exchange's 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 -0.0282-0.0731-0.0624-0.0832-0.1057-0.06980.0144-0.0256-0.06170.0275
M-score -2.28-2.58-2.92-2.76-2.90-2.70-2.40-2.26-2.75-2.20

Novo Nordisk A/S Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.00851.01031.02861.07231.00051.07111.02381.0991.05871.1443
GMI 0.99820.9940.99420.99220.98370.98580.98320.98850.99811.0015
AQI 1.22531.33821.08911.2591.111.08551.22230.90390.75860.756
SGI 1.06971.06381.04821.02031.01811.01811.02141.05521.05131.0467
DEPI 0000.20110.42250.93991.29311.43321.37251.1182
SGAI 0.97320.96660.93450.94630.96320.960.99061.00060.98350.9836
LVGI 0.94311.11871.26931.29871.27271.07331.01850.91990.99131.0532
TATA 0.0177-0.0662-0.0628-0.0363-0.0611-0.02490.0246-0.0172-0.0262-0.0458
M-score -2.33-2.74-2.86-2.65-2.86-2.51-2.21-2.39-2.55-2.62
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