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PDL BioPharma Inc (NAS:PDLI)
Beneish M-Score
-3.38 (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.

PDL BioPharma Inc has a M-score of -3.38 suggests that the company is not a manipulator.

PDLI' s Beneish M-Score Range Over the Past 10 Years
Min: -5.18   Max: 173.41
Current: -3.38

-5.18
173.41

During the past 13 years, the highest Beneish M-Score of PDL BioPharma Inc was 173.41. The lowest was -5.18. And the median was -2.43.


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 * 0.059+0.528 * 1+0.404 * 1.1+0.892 * 0.7496+0.115 * 0.9091
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3093+4.679 * 0.0155-0.327 * 0.5721
=-3.38

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2.9 Mil.
Revenue was 21.047 + 103.124 + 178.058 + 124.618 = $426.8 Mil.
Gross Profit was 21.047 + 103.124 + 178.058 + 124.618 = $426.8 Mil.
Total Current Assets was $320.7 Mil.
Total Assets was $1,049.2 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 $37.8 Mil.
Total Current Liabilities was $22.6 Mil.
Long-Term Debt was $232.8 Mil.
Net Income was 4.148 + 55.887 + 100.574 + 69.459 = $230.1 Mil.
Non Operating Income was -7.343 + -8.964 + -1.156 + -9.096 = $-26.6 Mil.
Cash Flow from Operations was 2.246 + 92.506 + 70.079 + 75.486 = $240.3 Mil.
Accounts Receivable was $65.2 Mil.
Revenue was 138.066 + 149.706 + 117.075 + 164.594 = $569.4 Mil.
Gross Profit was 138.066 + 149.706 + 117.075 + 164.594 = $569.4 Mil.
Total Current Assets was $367.1 Mil.
Total Assets was $995.5 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.1 Mil.
Selling, General & Admin. Expense(SGA) was $38.5 Mil.
Total Current Liabilities was $143.9 Mil.
Long-Term Debt was $279.8 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)
=(2.881 / 426.847) / (65.197 / 569.441)
=0.00674949 / 0.11449299
=0.059

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)
=(569.441 / 569.441) / (426.847 / 426.847)
=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 - (320.705 + 0.018) / 1049.191) / (1 - (367.097 + 0.042) / 995.541)
=0.694314 / 0.63121659
=1.1

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
=426.847 / 569.441
=0.7496

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))
=(0.06 / (0.06 + 0.042)) / (0.033 / (0.033 + 0.018))
=0.58823529 / 0.64705882
=0.9091

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)
=(37.792 / 426.847) / (38.507 / 569.441)
=0.08853758 / 0.06762246
=1.3093

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)
=((232.847 + 22.604) / 1049.191) / ((279.751 + 143.943) / 995.541)
=0.24347426 / 0.42559171
=0.5721

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
=(230.068 - -26.559 - 240.317) / 1049.191
=0.0155

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 -3.38 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.

PDL BioPharma Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.8310.2291.9990.07190.4121.2190.57980.68430.785191.6193
GMI 1111111111
AQI 0.91660.28990.4131.35511.52271.32292.5962.31640.78571.1454
SGI 1.18231.20051.3081.08151.08421.04951.0521.19791.27391.0159
DEPI 0.82121.23910.17651.11681.05960.81751.0461.03681.32791.2135
SGAI 0.76331.07580.9570.37795.8630.13051.32020.97530.92111.0175
LVGI 1.13050.97865.04640.79030.8470.89640.68590.65440.6440.55
TATA -0.1828-0.0738-0.06150.0035-0.23610.11270.01970.02530.08740.0601
M-score -3.38-3.62-3.22-2.91-4.62-1.41-2.03-1.82-1.94173.41

PDL BioPharma Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 68.0871162.375946.37450.77854.13377.36841.3291191.61931.45710.059
GMI 1111111111
AQI 3.37352.56042.89560.78570.94460.84291.07371.14541.16711.1
SGI 1.25821.22421.33071.28441.19431.11280.9191.01590.91540.7496
DEPI 1.00691.13791.26461.32791.40221.36772.32151.21351.02550.9091
SGAI 0.83930.81510.63540.91351.17181.2681.79281.01751.10021.3093
LVGI 0.59250.66470.65980.6440.77120.6710.67360.550.44180.5721
TATA 0.03440.07330.09410.08740.07840.06420.02810.06010.00970.0155
M-score 60.75147.3240.97-1.941.013.82-1.97173.41-1.85-3.38
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