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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 -2.78 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Pfizer Inc was -1.46. The lowest was -3.15. And the median was -2.47.
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 * 0.9355||+||0.528 * 1.0091||+||0.404 * 1.0063||+||0.892 * 0.9636||+||0.115 * 1.1208|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0002||+||4.679 * -0.0482||-||0.327 * 1.0243|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $10,388 Mil.|
Revenue was 12773 + 11353 + 13558 + 12643 = $50,327 Mil.
Gross Profit was 10311 + 9308 + 10764 + 10356 = $40,739 Mil.
Total Current Assets was $58,287 Mil.
Total Assets was $172,612 Mil.
Property, Plant and Equipment(Net PPE) was $12,179 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,890 Mil.
Selling, General & Admin. Expense(SGA) was $14,107 Mil.
Total Current Liabilities was $21,938 Mil.
Long-Term Debt was $32,267 Mil.
Net Income was 2912 + 2329 + 2568 + 2590 = $10,399 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 4087 + 2935 + 5786 + 5919 = $18,727 Mil.
|Accounts Receivable was $11,523 Mil.
Revenue was 12973 + 12410 + 13891 + 12953 = $52,227 Mil.
Gross Profit was 10731 + 10147 + 11138 + 10644 = $42,660 Mil.
Total Current Assets was $61,435 Mil.
Total Assets was $179,335 Mil.
Property, Plant and Equipment(Net PPE) was $12,443 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,163 Mil.
Selling, General & Admin. Expense(SGA) was $14,636 Mil.
Total Current Liabilities was $23,450 Mil.
Long-Term Debt was $31,532 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)|
|=||(10388 / 50327)||/||(11523 / 52227)|
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)|
|=||(9308 / 52227)||/||(10311 / 50327)|
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 - (58287 + 12179) / 172612)||/||(1 - (61435 + 12443) / 179335)|
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))|
|=||(7163 / (7163 + 12443))||/||(5890 / (5890 + 12179))|
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)|
|=||(14107 / 50327)||/||(14636 / 52227)|
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)|
|=||((32267 + 21938) / 172612)||/||((31532 + 23450) / 179335)|
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|
|=||(10399 - 0||-||18727)||/||172612|
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 -2.78 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