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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

PFE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.16   Max: -1.49
Current: -2.65

-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 -2.61.


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 * 0.9577+0.528 * 1.0055+0.404 * 1.1129+0.892 * 0.9848+0.115 * 1.1745
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0666+4.679 * -0.0302-0.327 * 1.1067
=-2.65

* 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 $8,176 Mil.
Revenue was 14047 + 12087 + 11853 + 10864 = $48,851 Mil.
Gross Profit was 10637 + 9868 + 9673 + 9026 = $39,204 Mil.
Total Current Assets was $43,804 Mil.
Total Assets was $167,460 Mil.
Property, Plant and Equipment(Net PPE) was $13,766 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,157 Mil.
Selling, General & Admin. Expense(SGA) was $14,808 Mil.
Total Current Liabilities was $29,399 Mil.
Long-Term Debt was $28,818 Mil.
Net Income was -172 + 2130 + 2626 + 2376 = $6,960 Mil.
Non Operating Income was -1994 + -504 + 0 + 0 = $-2,498 Mil.
Cash Flow from Operations was 4713 + 5024 + 4090 + 685 = $14,512 Mil.
Accounts Receivable was $8,669 Mil.
Revenue was 13118 + 12361 + 12773 + 11353 = $49,605 Mil.
Gross Profit was 10416 + 9993 + 10311 + 9308 = $40,028 Mil.
Total Current Assets was $57,702 Mil.
Total Assets was $169,274 Mil.
Property, Plant and Equipment(Net PPE) was $11,762 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,537 Mil.
Selling, General & Admin. Expense(SGA) was $14,097 Mil.
Total Current Liabilities was $21,631 Mil.
Long-Term Debt was $31,541 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)
=(8176 / 48851) / (8669 / 49605)
=0.16736607 / 0.17476061
=0.9577

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)
=(9868 / 49605) / (10637 / 48851)
=0.80693478 / 0.80252195
=1.0055

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 - (43804 + 13766) / 167460) / (1 - (57702 + 11762) / 169274)
=0.65621641 / 0.58963574
=1.1129

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
=48851 / 49605
=0.9848

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))
=(5537 / (5537 + 11762)) / (5157 / (5157 + 13766))
=0.3200763 / 0.2725255
=1.1745

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)
=(14808 / 48851) / (14097 / 49605)
=0.30312583 / 0.28418506
=1.0666

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)
=((28818 + 29399) / 167460) / ((31541 + 21631) / 169274)
=0.3476472 / 0.31411794
=1.1067

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
=(6960 - -2498 - 14512) / 167460
=-0.0302

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 -2.65 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.01111.0470.91241.57890.73580.93661.03970.86440.96340.9577
GMI 1.00641.09660.92291.01191.0820.97890.96090.99221.0091.0055
AQI 0.96261.03041.07841.22420.98081.01850.98141.01610.98081.1129
SGI 1.02041.0010.99751.03551.35590.99430.87480.87450.96160.9848
DEPI 1.05910.97190.89681.60330.5620.88421.00811.01171.06481.1745
SGAI 0.99771.00140.93270.98820.97250.99820.97560.98791.02121.0667
LVGI 0.80511.05691.24421.20020.910.97510.95810.97411.00431.1067
TATA 0.011-0.0509-0.0842-0.0396-0.0236-0.0477-0.01340.0246-0.0453-0.0324
M-score -2.34-2.63-3.05-2.00-2.50-2.78-2.63-2.59-2.76-2.66

Pfizer Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.8540.84140.99450.94780.98380.97630.89981.00030.9577
GMI 0.99390.9880.99661.00261.00461.00660.99760.99181.0055
AQI 1.01611.02031.00631.01120.98081.04851.02661.09921.1129
SGI 0.88520.87720.90650.92360.94170.97210.95770.95760.9848
DEPI 1.01171.0241.08221.08241.06481.04341.06641.20461.1745
SGAI 0.99170.99620.98261.0041.01671.02751.03831.00571.0666
LVGI 0.97410.96911.02431.01251.00431.01151.0071.10671.1067
TATA 0.01930.0136-0.0451-0.0351-0.0398-0.0276-0.0294-0.0312-0.0302
M-score -2.61-2.66-2.77-2.75-2.74-2.64-2.74-2.64-2.65
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