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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 -2.48 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Pfizer Inc was -1.60. The lowest was -3.06. And the median was -2.48.
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 * 0.9268||+||0.528 * 1.0081||+||0.404 * 1.0366||+||0.892 * 0.9457||+||0.115 * 1.0763|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0069||+||4.679 * 0.0162||-||0.327 * 0.965|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $9,357 Mil.|
Revenue was 13558 + 12643 + 12973 + 13500 = $52,674 Mil.
Gross Profit was 10764 + 10356 + 10731 + 10848 = $42,699 Mil.
Total Current Assets was $56,244 Mil.
Total Assets was $172,101 Mil.
Property, Plant and Equipment(Net PPE) was $12,397 Mil.
Depreciation, Depletion and Amortization(DDA) was $6,410 Mil.
Selling, General & Admin. Expense(SGA) was $14,723 Mil.
Total Current Liabilities was $23,366 Mil.
Long-Term Debt was $30,462 Mil.
Net Income was 2568 + 2590 + 14095 + 2750 = $22,003 Mil.
Non Operating Income was 0 + 0 + 1324 + 126 = $1,450 Mil.
Cash Flow from Operations was 5786 + 5908 + 3830 + 2241 = $17,765 Mil.
|Accounts Receivable was $10,675 Mil.
Revenue was 13891 + 12953 + 13968 + 14885 = $55,697 Mil.
Gross Profit was 11138 + 10644 + 11592 + 12140 = $45,514 Mil.
Total Current Assets was $64,831 Mil.
Total Assets was $185,798 Mil.
Property, Plant and Equipment(Net PPE) was $13,213 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,655 Mil.
Selling, General & Admin. Expense(SGA) was $15,461 Mil.
Total Current Liabilities was $29,186 Mil.
Long-Term Debt was $31,036 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(9357 / 52674)||/||(10675 / 55697)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(10356 / 55697)||/||(10764 / 52674)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (56244 + 12397) / 172101)||/||(1 - (64831 + 13213) / 185798)|
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.
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))|
|=||(7655 / (7655 + 13213))||/||(6410 / (6410 + 12397))|
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)|
|=||(14723 / 52674)||/||(15461 / 55697)|
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)|
|=||((30462 + 23366) / 172101)||/||((31036 + 29186) / 185798)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(22003 - 1450||-||17765)||/||172101|
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 -2.48 suggests that the company will not be a manipulator.
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
Pfizer Inc Annual Data
Pfizer Inc Quarterly Data