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PDL BioPharma Inc (NAS:PDLI)
Beneish M-Score
173.41 (As of Today)

Warning Sign:

Beneish M-Score 173.41 higher than -2.22, which implies that it might have manipulated its financial results.

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.

PDL BioPharma Inc has a M-score of 173.41 signals that the company is a manipulator.

PDLI' s Beneish M-Score Range Over the Past 10 Years
Min: -4.58   Max: 173.41
Current: 173.41

-4.58
173.41

During the past 13 years, the highest Beneish M-Score of PDL BioPharma Inc was 173.41. The lowest was -4.58. And the median was -2.30.


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 PDL BioPharma 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 * 191.6198+0.528 * 1+0.404 * 1.1454+0.892 * 1.0159+0.115 * 1.2135
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0175+4.679 * 0.0601-0.327 * 0.55
=173.41

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $58.4 Mil.
Revenue was 178.058 + 124.618 + 138.066 + 149.706 = $590.4 Mil.
Gross Profit was 178.058 + 124.618 + 138.066 + 149.706 = $590.4 Mil.
Total Current Assets was $282.7 Mil.
Total Assets was $1,016.2 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.0 Mil.
Selling, General & Admin. Expense(SGA) was $36.1 Mil.
Total Current Liabilities was $36.7 Mil.
Long-Term Debt was $232.8 Mil.
Net Income was 100.574 + 69.459 + 78.264 + 84.498 = $332.8 Mil.
Non Operating Income was -1.156 + -9.096 + -8.966 + -10.534 = $-29.8 Mil.
Cash Flow from Operations was 70.079 + 75.486 + 84.054 + 71.846 = $301.5 Mil.
Accounts Receivable was $0.3 Mil.
Revenue was 117.075 + 164.594 + 162.752 + 136.804 = $581.2 Mil.
Gross Profit was 117.075 + 164.594 + 162.752 + 136.804 = $581.2 Mil.
Total Current Assets was $355.9 Mil.
Total Assets was $962.4 Mil.
Property, Plant and Equipment(Net PPE) was $0.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.1 Mil.
Selling, General & Admin. Expense(SGA) was $34.9 Mil.
Total Current Liabilities was $188.0 Mil.
Long-Term Debt was $276.2 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)
=(58.398 / 590.448) / (0.3 / 581.225)
=0.09890456 / 0.00051615
=191.6198

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)
=(124.618 / 581.225) / (178.058 / 590.448)
=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 - (282.71 + 0.031) / 1016.178) / (1 - (355.897 + 0.062) / 962.35)
=0.72176036 / 0.63011482
=1.1454

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
=590.448 / 581.225
=1.0159

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))
=(0.134 / (0.134 + 0.062)) / (0.04 / (0.04 + 0.031))
=0.68367347 / 0.56338028
=1.2135

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)
=(36.09 / 590.448) / (34.914 / 581.225)
=0.06112308 / 0.06006968
=1.0175

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)
=((232.835 + 36.741) / 1016.178) / ((276.228 + 187.983) / 962.35)
=0.26528423 / 0.48237232
=0.55

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
=(332.795 - -29.752 - 301.465) / 1016.178
=0.0601

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.

PDL BioPharma Inc has a M-score of 173.41 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.

PDL BioPharma Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.66240.44042.30070.07190.4121.2190.58970.69310.762191.6193
GMI 0.99060.792111111.01290.98731
AQI 0.91660.28990.4131.35511.52271.32292.5962.31640.78571.1454
SGI 1.48320.62431.13651.08131.08421.04951.03451.18261.31231.0159
DEPI 0.82121.23910.17651.11681.05960.81751.0460.94871.45131.2135
SGAI 0.98910.89290.67320.37795.8630.1151.5240.98790.89421.0175
LVGI 1.13050.97865.04640.79030.8470.89640.68590.65440.6440.55
TATA -0.1828-0.0738-0.06150.0035-0.23610.11270.0052-0.01170.08740.0601
M-score -3.31-4.02-3.05-2.91-4.62-1.41-2.14-2.01-1.92173.41

PDL BioPharma Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.0570.689968.0871162.375946.37450.77854.13377.36841.3291191.6193
GMI 1111111111
AQI 1.19652.31643.37352.56042.89560.78570.94460.84291.07371.1454
SGI 1.19831.18811.25821.22421.33071.28441.19431.11280.9191.0159
DEPI 1.06641.03681.00691.13791.26461.32791.40220.80922.32151.2135
SGAI 1.09590.98330.83930.81510.63540.91351.17181.2681.79281.0175
LVGI 0.61010.65440.59250.66470.65980.6440.77120.6710.67360.55
TATA 0.01060.01840.03440.07330.09410.08740.07840.06420.02810.0601
M-score -2.92-1.8660.75147.3240.97-1.941.013.76-1.97173.41
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