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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.76 (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.

Pfizer Inc has a M-score of -2.76 suggests that the company is not a manipulator.

PFE' s 10-Year Beneish M-Score Range
Min: -3.16   Max: -1.49
Current: -2.76

-3.16
-1.49

During the past 13 years, the highest Beneish M-Score of Pfizer Inc was -1.49. The lowest was -3.16. And the median was -2.51.


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 Pfizer 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 * 0.9081+0.528 * 1.0116+0.404 * 1.0112+0.892 * 0.9639+0.115 * 1.1284
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.018+4.679 * -0.0398-0.327 * 1.0125
=-2.76

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $9,954 Mil.
Revenue was 12361 + 12773 + 11353 + 13558 = $50,045 Mil.
Gross Profit was 9993 + 10311 + 9308 + 10764 = $40,376 Mil.
Total Current Assets was $56,987 Mil.
Total Assets was $171,362 Mil.
Property, Plant and Equipment(Net PPE) was $12,032 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,695 Mil.
Selling, General & Admin. Expense(SGA) was $14,268 Mil.
Total Current Liabilities was $19,920 Mil.
Long-Term Debt was $31,666 Mil.
Net Income was 2666 + 2912 + 2329 + 2568 = $10,475 Mil.
Non Operating Income was -1 + 0 + 0 + 0 = $-1 Mil.
Cash Flow from Operations was 4463 + 4087 + 2935 + 5805 = $17,290 Mil.
Accounts Receivable was $11,371 Mil.
Revenue was 12643 + 12973 + 12410 + 13891 = $51,917 Mil.
Gross Profit was 10356 + 10731 + 10147 + 11138 = $42,372 Mil.
Total Current Assets was $59,500 Mil.
Total Assets was $175,521 Mil.
Property, Plant and Equipment(Net PPE) was $12,359 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,028 Mil.
Selling, General & Admin. Expense(SGA) was $14,540 Mil.
Total Current Liabilities was $20,373 Mil.
Long-Term Debt was $31,812 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)
=(9954 / 50045) / (11371 / 51917)
=0.19890099 / 0.21902267
=0.9081

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)
=(10311 / 51917) / (9993 / 50045)
=0.81614885 / 0.80679389
=1.0116

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 - (56987 + 12032) / 171362) / (1 - (59500 + 12359) / 175521)
=0.59723276 / 0.590596
=1.0112

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
=50045 / 51917
=0.9639

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))
=(7028 / (7028 + 12359)) / (5695 / (5695 + 12032))
=0.36251096 / 0.32126135
=1.1284

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)
=(14268 / 50045) / (14540 / 51917)
=0.28510341 / 0.28006241
=1.018

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)
=((31666 + 19920) / 171362) / ((31812 + 20373) / 175521)
=0.30103524 / 0.29731485
=1.0125

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
=(10475 - -1 - 17290) / 171362
=-0.0398

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.

Pfizer Inc has a M-score of -2.76 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.

Pfizer Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.99051.00431.01111.0470.91241.57890.76570.89240.97610.9288
GMI 0.90351.02611.00641.09660.92291.01191.06360.98570.95611.0076
AQI 0.91620.86450.96261.03041.07841.22420.98080.99990.97991.0366
SGI 1.0950.96771.02041.0010.99751.03551.30311.00140.83750.9438
DEPI 0.83650.84841.05910.97190.89681.60330.56610.85070.9781.0763
SGAI 0.92511.0340.99771.00140.93270.98820.97880.99110.96191.0026
LVGI 1.07911.08410.80511.05691.24421.20020.910.9880.95460.965
TATA -0.0339-0.05110.011-0.0509-0.0912-0.0373-0.0164-0.0544-0.01170.0246
M-score -2.68-2.84-2.34-2.63-3.08-1.99-2.49-2.85-2.71-2.44

Pfizer Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.88710.89270.96491.08181.05511.01350.94640.77740.93550.9081
GMI 0.9720.9740.95750.96830.98270.99151.00371.00381.00911.0116
AQI 0.99991.02940.97990.93950.98350.97271.03661.02031.00631.0112
SGI 0.95590.89070.84730.830.84780.89590.92620.94940.96360.9639
DEPI 0.87110.92260.9781.05050.99640.96731.07631.03111.12081.1284
SGAI 0.94690.96660.96260.9620.99860.99431.00251.01521.00021.018
LVGI 0.99811.02250.95460.96450.9090.90160.9650.96911.02431.0125
TATA -0.0281-0.0354-0.0023-0.00190.05780.05040.02460.0185-0.0482-0.0398
M-score -2.77-2.85-2.67-2.58-2.28-2.31-2.44-2.62-2.78-2.76
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