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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.78 (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 -2.78 suggests that the company is not a manipulator.

PFE' s 10-Year Beneish M-Score Range
Min: -3.16   Max: -1.49
Current: -2.78

-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 -2.49.


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 * 0.9355+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
=-2.78

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

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

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)
=(10388 / 50327) / (11523 / 52227)
=0.20641008 / 0.22063301
=0.9355

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)
=(9308 / 52227) / (10311 / 50327)
=0.81681889 / 0.80948596
=1.0091

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 - (58287 + 12179) / 172612) / (1 - (61435 + 12443) / 179335)
=0.59176651 / 0.58804472
=1.0063

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
=50327 / 52227
=0.9636

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))
=0.36534734 / 0.32597266
=1.1208

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)
=0.28030679 / 0.28023819
=1.0002

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)
=0.31402799 / 0.30658823
=1.0243

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
=(10399 - 0 - 18727) / 172612
=-0.0482

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.


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 0.99051.00431.01111.0470.91241.57890.76570.89240.97610.9288
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 -2.68-2.84-2.34-2.63-3.08-1.99-2.49-2.85-2.71-2.44

Pfizer Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.94830.88710.89270.96491.08181.05511.01350.94640.77740.9355
GMI 0.98590.9720.9740.95750.96830.98270.99151.00371.00381.0091
AQI 1.0210.99991.02940.97990.93950.98350.97271.03661.02031.0063
SGI 0.98510.95590.89070.84730.830.84780.89590.92620.94940.9636
DEPI 0.86560.87110.92260.9781.05050.99640.97641.07631.03111.1208
SGAI 0.98050.94690.96660.96260.9620.99860.99431.00251.01521.0002
LVGI 0.98740.99811.02250.95460.96450.9090.90160.9650.96911.0243
TATA -0.0427-0.0281-0.0354-0.0023-0.00190.05780.05030.02460.0185-0.0482
M-score -2.75-2.77-2.85-2.67-2.58-2.28-2.31-2.44-2.62-2.78
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