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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.61 (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 -2.61 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: -2.61

-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 -2.57.


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 * 0.9754+0.528 * 1.0231+0.404 * 1.0688+0.892 * 1.0382+0.115 * 1.1248
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0263+4.679 * -0.0313-0.327 * 1.1245
=-2.61

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $9,033 Mil.
Revenue was 13005 + 14047 + 12087 + 11853 = $50,992 Mil.
Gross Profit was 10154 + 10637 + 9868 + 9673 = $40,332 Mil.
Total Current Assets was $41,298 Mil.
Total Assets was $162,929 Mil.
Property, Plant and Equipment(Net PPE) was $13,584 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,322 Mil.
Selling, General & Admin. Expense(SGA) was $15,089 Mil.
Total Current Liabilities was $28,735 Mil.
Long-Term Debt was $27,824 Mil.
Net Income was 3016 + -172 + 2130 + 2626 = $7,600 Mil.
Non Operating Income was -278 + -1994 + -504 + 0 = $-2,776 Mil.
Cash Flow from Operations was 1651 + 4713 + 5024 + 4095 = $15,483 Mil.
Accounts Receivable was $8,920 Mil.
Revenue was 10864 + 13118 + 12361 + 12773 = $49,116 Mil.
Gross Profit was 9026 + 10416 + 9993 + 10311 = $39,746 Mil.
Total Current Assets was $49,443 Mil.
Total Assets was $160,640 Mil.
Property, Plant and Equipment(Net PPE) was $11,527 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,341 Mil.
Selling, General & Admin. Expense(SGA) was $14,161 Mil.
Total Current Liabilities was $20,222 Mil.
Long-Term Debt was $29,370 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)
=(9033 / 50992) / (8920 / 49116)
=0.17714543 / 0.18161088
=0.9754

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)
=(39746 / 49116) / (40332 / 50992)
=0.80922714 / 0.7909476
=1.0231

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 - (41298 + 13584) / 162929) / (1 - (49443 + 11527) / 160640)
=0.66315389 / 0.62045568
=1.0688

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
=50992 / 49116
=1.0382

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))
=(5341 / (5341 + 11527)) / (5322 / (5322 + 13584))
=0.31663505 / 0.28149794
=1.1248

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)
=(15089 / 50992) / (14161 / 49116)
=0.29590916 / 0.28831745
=1.0263

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)
=((27824 + 28735) / 162929) / ((29370 + 20222) / 160640)
=0.34713894 / 0.30871514
=1.1245

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
=(7600 - -2776 - 15483) / 162929
=-0.0313

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 -2.61 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 1.09421.0470.91241.57890.73580.89870.93451.00230.93360.9882
GMI 0.99021.09660.92291.01191.0820.97890.96090.99221.0091.0055
AQI 0.96261.03041.07841.22420.98080.99990.97991.03660.99481.0973
SGI 0.94291.0010.99751.03551.35590.99430.87480.87450.96160.9848
DEPI 1.05910.97190.89681.60330.5620.84960.98991.07241.06481.1745
SGAI 0.97271.00140.93270.98820.97250.99820.97560.98791.02121.0667
LVGI 0.80511.05691.24421.20020.910.9880.95460.9651.01371.0965
TATA 0.011-0.0509-0.0659-0.0396-0.0236-0.0477-0.01340.0246-0.0458-0.0324
M-score -2.34-2.63-2.96-2.00-2.50-2.83-2.73-2.44-2.79-2.64

Pfizer Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.94640.77740.93550.90810.93360.97630.89981.00030.98820.9754
GMI 1.00371.00381.00911.01161.0091.00660.99760.99181.00551.0231
AQI 1.03661.02031.00631.01120.99481.04851.02661.09921.09731.0688
SGI 0.92620.94940.96360.96390.96160.97210.95770.95760.98481.0382
DEPI 1.07631.03111.12081.12841.06481.04341.05411.19011.17451.1248
SGAI 1.00251.01521.00021.0181.02121.02751.03831.00571.06661.0263
LVGI 0.9650.96911.02431.01251.01371.01151.0071.10671.09651.1245
TATA 0.0220.0159-0.0509-0.0432-0.0464-0.0353-0.0371-0.0376-0.0314-0.0313
M-score -2.46-2.63-2.80-2.78-2.79-2.67-2.78-2.67-2.63-2.61
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