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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

PFE' s 10-Year Beneish M-Score Range
Min: -3.16   Max: -1.49
Current: -2.77

-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 -2.56.


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 * 0.8998+0.528 * 0.9976+0.404 * 1.0266+0.892 * 0.9577+0.115 * 1.0541
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0383+4.679 * -0.0357-0.327 * 1.007
=-2.77

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $8,951 Mil.
Revenue was 11853 + 10864 + 13118 + 12361 = $48,196 Mil.
Gross Profit was 9673 + 9026 + 10416 + 9993 = $39,108 Mil.
Total Current Assets was $51,715 Mil.
Total Assets was $160,878 Mil.
Property, Plant and Equipment(Net PPE) was $11,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,118 Mil.
Selling, General & Admin. Expense(SGA) was $14,027 Mil.
Total Current Liabilities was $24,143 Mil.
Long-Term Debt was $26,729 Mil.
Net Income was 2626 + 2376 + 1228 + 2666 = $8,896 Mil.
Non Operating Income was 0 + 0 + 0 + -1 = $-1 Mil.
Cash Flow from Operations was 4090 + 685 + 5398 + 4463 = $14,636 Mil.
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.



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)
=(8951 / 48196) / (10388 / 50327)
=0.18572081 / 0.20641008
=0.8998

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)
=(9026 / 50327) / (9673 / 48196)
=0.80948596 / 0.81143663
=0.9976

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 - (51715 + 11432) / 160878) / (1 - (58287 + 12179) / 172612)
=0.60748518 / 0.59176651
=1.0266

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
=48196 / 50327
=0.9577

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))
=(5890 / (5890 + 12179)) / (5118 / (5118 + 11432))
=0.32597266 / 0.30924471
=1.0541

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)
=(14027 / 48196) / (14107 / 50327)
=0.29104075 / 0.28030679
=1.0383

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)
=((26729 + 24143) / 160878) / ((32267 + 21938) / 172612)
=0.31621477 / 0.31402799
=1.007

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
=(8896 - -1 - 14636) / 160878
=-0.0357

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 -2.77 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00431.01111.0470.91241.57890.76570.89240.97610.92880.9634
GMI 1.02611.00641.09660.92291.01191.06360.98570.95611.00761.009
AQI 0.86450.96261.03041.07841.22420.98080.99990.97991.03660.9808
SGI 0.96771.02041.0010.99751.03551.30311.00140.83750.94380.9616
DEPI 0.84841.05910.97190.89681.60330.56610.85070.9781.07631.0648
SGAI 1.0340.99771.00140.93270.98820.97880.99110.96191.00261.0212
LVGI 1.08410.80511.05691.24421.20020.910.9880.95460.9651.0043
TATA -0.05110.011-0.0509-0.0912-0.0373-0.0164-0.0544-0.01170.0251-0.0458
M-score -2.84-2.34-2.63-3.08-1.99-2.49-2.85-2.71-2.44-2.76

Pfizer Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.08181.05511.01350.94640.77740.93550.90810.96340.97630.8998
GMI 0.96830.98270.99151.00371.00381.00911.01161.0091.00660.9976
AQI 0.93950.98350.97271.03661.02031.00631.01120.98081.04851.0266
SGI 0.830.84780.89590.92620.94940.96360.96390.96160.97210.9577
DEPI 1.05050.99640.96731.07631.03111.12081.12841.06481.04341.0541
SGAI 0.9620.99860.99431.00251.01521.00021.0181.02121.02751.0383
LVGI 0.96450.9090.90160.9650.96911.02431.01251.00431.01151.007
TATA -0.00190.05780.05040.02510.019-0.0478-0.0393-0.0458-0.0339-0.0357
M-score -2.58-2.28-2.31-2.44-2.62-2.78-2.76-2.76-2.67-2.77
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