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Pfizer Inc (NYSE:PFE)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

PFE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.17   Max: -1.59
Current: -2.67

-3.17
-1.59

During the past 13 years, the highest Beneish M-Score of Pfizer Inc was -1.59. The lowest was -3.17. And the median was -2.74.


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 * 1.0003+0.528 * 0.9918+0.404 * 1.0992+0.892 * 0.9576+0.115 * 1.1901
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0057+4.679 * -0.0368-0.327 * 1.1067
=-2.67

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $9,535 Mil.
Revenue was 12087 + 11853 + 10864 + 13118 = $47,922 Mil.
Gross Profit was 9868 + 9673 + 9026 + 10416 = $38,983 Mil.
Total Current Assets was $45,001 Mil.
Total Assets was $170,867 Mil.
Property, Plant and Equipment(Net PPE) was $13,695 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,064 Mil.
Selling, General & Admin. Expense(SGA) was $13,741 Mil.
Total Current Liabilities was $27,845 Mil.
Long-Term Debt was $29,079 Mil.
Net Income was 2130 + 2626 + 2376 + 1228 = $8,360 Mil.
Non Operating Income was -504 + 0 + 0 + -39 = $-543 Mil.
Cash Flow from Operations was 5024 + 4090 + 685 + 5398 = $15,197 Mil.
Accounts Receivable was $9,954 Mil.
Revenue was 12361 + 12773 + 11353 + 13558 = $50,045 Mil.
Gross Profit was 9993 + 10311 + 9308 + 10764 = $40,376 Mil.
Total Current Assets was $56,987 Mil.
Total Assets was $171,362 Mil.
Property, Plant and Equipment(Net PPE) was $12,032 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,695 Mil.
Selling, General & Admin. Expense(SGA) was $14,268 Mil.
Total Current Liabilities was $19,920 Mil.
Long-Term Debt was $31,666 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)
=(9535 / 47922) / (9954 / 50045)
=0.19896916 / 0.19890099
=1.0003

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)
=(9673 / 50045) / (9868 / 47922)
=0.80679389 / 0.81346772
=0.9918

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 - (45001 + 13695) / 170867) / (1 - (56987 + 12032) / 171362)
=0.65648136 / 0.59723276
=1.0992

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
=47922 / 50045
=0.9576

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))
=(5695 / (5695 + 12032)) / (5064 / (5064 + 13695))
=0.32126135 / 0.26995042
=1.1901

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)
=(13741 / 47922) / (14268 / 50045)
=0.28673678 / 0.28510341
=1.0057

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)
=((29079 + 27845) / 170867) / ((31666 + 19920) / 171362)
=0.333148 / 0.30103524
=1.1067

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
=(8360 - -543 - 15197) / 170867
=-0.0368

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 -2.67 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 1.01111.0470.91241.57890.76570.95410.91290.92880.9634
GMI 1.00641.09660.92291.01191.06360.97220.96941.00761.009
AQI 0.96261.03041.07841.22420.98080.99990.97991.03660.9808
SGI 1.02041.0010.99751.03551.30310.93660.89550.94380.9616
DEPI 1.05910.97190.89681.60330.56610.84350.98631.07631.0648
SGAI 0.99771.00140.93270.98820.97880.98930.96361.00261.0212
LVGI 0.80511.05691.24421.20020.910.9880.95460.9651.0043
TATA 0.011-0.0509-0.0912-0.0373-0.0164-0.0544-0.01170.0251-0.0458
M-score -2.34-2.63-3.08-1.99-2.49-2.86-2.71-2.44-2.76

Pfizer Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.93960.94640.77740.93550.90810.96340.97630.89981.0003
GMI 1.0091.00371.00381.00911.01161.0091.00660.99760.9918
AQI 0.97271.03661.02031.00631.01120.98081.04851.02661.0992
SGI 0.96640.92620.94940.96360.96390.96160.97210.95770.9576
DEPI 0.97671.07631.03111.12081.12841.06481.04341.05411.1901
SGAI 0.99841.00251.01521.00021.0181.02121.02751.03831.0057
LVGI 0.90160.9650.96911.02431.01251.00431.01151.0071.1067
TATA 0.05040.02510.019-0.0478-0.0401-0.0464-0.0346-0.0363-0.0368
M-score -2.31-2.44-2.62-2.78-2.77-2.77-2.67-2.77-2.67
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