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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.48 (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 -2.48 suggests that the company is not a manipulator.

PFE' s 10-Year Beneish M-Score Range
Min: -3.06   Max: -1.6
Current: -2.48

-3.06
-1.6

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.


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 * 0.9268+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
=-2.48

* 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

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)
=(9357 / 52674) / (10675 / 55697)
=0.17763982 / 0.19166203
=0.9268

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)
=(10356 / 55697) / (10764 / 52674)
=0.81717148 / 0.81062763
=1.0081

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 - (56244 + 12397) / 172101) / (1 - (64831 + 13213) / 185798)
=0.60115862 / 0.57995242
=1.0366

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
=52674 / 55697
=0.9457

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))
=0.3668296 / 0.34083054
=1.0763

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)
=0.27951171 / 0.27759125
=1.0069

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)
=0.31276983 / 0.3241262
=0.965

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
=(22003 - 1450 - 17765) / 172101
=0.0162

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.


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.01370.99141.00991.05490.93751.56380.73061.48590.5680.9288
GMI 0.90351.02611.00641.09660.92291.01191.06360.98570.95611.0076
AQI 0.91620.86450.96261.03041.07841.22420.98080.99990.97991.0366
SGI 1.0950.96771.02041.0010.99751.03551.30311.00140.83750.9438
DEPI 0.83650.84841.05910.97190.89681.60330.56610.85070.9781.0763
SGAI 0.92511.0340.99771.00140.93270.98820.97880.99110.96191.0026
LVGI 1.07911.08410.80511.05691.24421.20020.910.9880.95460.965
TATA -0.0339-0.05110.011-0.0509-0.0912-0.0373-0.0164-0.0544-0.01170.0246
M-score -2.66-2.85-2.34-2.63-3.06-2.00-2.53-2.31-3.09-2.44

Pfizer Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.70331.47510.98180.92740.95140.56151.12240.60250.98240.9268
GMI 0.96980.9880.98590.9720.9740.95750.97240.9870.99581.0081
AQI 0.95780.99991.0210.99991.02940.97990.93950.98350.97271.0366
SGI 0.98221.00880.98510.95590.89070.84730.8470.86550.91470.9457
DEPI 0.9220.85070.86560.87110.92260.9781.05051.00560.97641.0763
SGAI 1.00830.99050.98050.94690.96660.96260.96631.00280.99861.0069
LVGI 0.97710.9880.98740.99811.02250.95460.96450.9090.90160.965
TATA -0.0456-0.0544-0.0427-0.0281-0.0354-0.0023-0.00220.04960.0420.0162
M-score -2.10-2.31-2.72-2.74-2.80-3.04-2.53-2.72-2.36-2.48
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