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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

PFE' s 10-Year Beneish M-Score Range
Min: -3.08   Max: -1.57
Current: -2.76

-3.08
-1.57

During the past 13 years, the highest Beneish M-Score of Pfizer Inc was -1.57. The lowest was -3.08. And the median was -2.63.


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 * 0.9838+0.528 * 1.0046+0.404 * 0.9808+0.892 * 0.9417+0.115 * 1.0648
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0167+4.679 * -0.0458-0.327 * 1.0043
=-2.76

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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.
Net Income was 1228 + 2666 + 2912 + 2329 = $9,135 Mil.
Non Operating Income was 0 + -1 + 0 + 0 = $-1 Mil.
Cash Flow from Operations was 5398 + 4463 + 4087 + 2935 = $16,883 Mil.
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.



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)
=(8669 / 49605) / (9357 / 52674)
=0.17476061 / 0.17763982
=0.9838

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)
=(9993 / 52674) / (10416 / 49605)
=0.81062763 / 0.80693478
=1.0046

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 - (57702 + 11762) / 169274) / (1 - (56244 + 12397) / 172101)
=0.58963574 / 0.60115862
=0.9808

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
=49605 / 52674
=0.9417

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))
=(6410 / (6410 + 12397)) / (5537 / (5537 + 11762))
=0.34083054 / 0.3200763
=1.0648

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)
=(14097 / 49605) / (14723 / 52674)
=0.28418506 / 0.27951171
=1.0167

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)
=((31541 + 21631) / 169274) / ((30462 + 23366) / 172101)
=0.31411794 / 0.31276983
=1.0043

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
=(9135 - -1 - 16883) / 169274
=-0.0458

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 -2.76 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 1.00431.01111.0470.91241.57890.73580.93661.03970.86440.9634
GMI 1.02611.00641.09660.92291.01191.0820.97890.96090.99221.009
AQI 0.86450.96261.03041.07841.22420.98081.01850.98141.01610.9808
SGI 0.96771.02041.0010.99751.03551.35590.99430.87480.87450.9616
DEPI 0.84841.05910.97190.89681.60330.5620.88421.00811.01171.0648
SGAI 1.0340.99771.00140.93270.98820.97250.99820.97560.98791.0212
LVGI 1.08410.80511.05691.24421.20020.910.97510.95810.97411.0043
TATA -0.05110.011-0.0509-0.0912-0.0373-0.0164-0.0477-0.01340.0246-0.0458
M-score -2.84-2.34-2.63-3.08-1.99-2.46-2.78-2.63-2.59-2.76

Pfizer Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.88691.03071.0341.03761.02530.8540.84140.99450.94780.9838
GMI 0.96810.96350.97340.98340.98770.99390.9880.99661.00261.0046
AQI 1.02940.98140.93950.98350.97271.01611.02031.00631.01120.9808
SGI 0.89660.88260.86840.86210.88560.88520.87720.90650.92360.9417
DEPI 0.92051.00811.0691.03311.01241.01171.0241.08221.08241.0648
SGAI 0.97440.97620.97821.01491.00260.99170.99620.98261.0041.0167
LVGI 1.02250.95810.96450.9090.90160.97410.96911.02431.01251.0043
TATA -0.0203-0.0134-0.01320.03830.02650.01620.0105-0.0482-0.0397-0.0458
M-score -2.79-2.63-2.64-2.37-2.42-2.63-2.67-2.79-2.77-2.76
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