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Questcor Pharmaceuticals Inc (NAS:QCOR)
Beneish M-Score
-1.97 (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.

Questcor Pharmaceuticals Inc has a M-score of -1.97 signals that the company is a manipulator.

QCOR' s 10-Year Beneish M-Score Range
Min: -5.42   Max: 3.89
Current: -1.97

-5.42
3.89

During the past 13 years, the highest Beneish M-Score of Questcor Pharmaceuticals Inc was 3.89. The lowest was -5.42. And the median was -2.26.


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 Questcor Pharmaceuticals 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 * 1.0108+0.528 * 1.0196+0.404 * 1.8422+0.892 * 1.6244+0.115 * 0.2255
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8433+4.679 * -0.0897-0.327 * 0.7608
=-1.97

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $97.3 Mil.
Revenue was 227.104 + 242.881 + 236.346 + 184.573 = $890.9 Mil.
Gross Profit was 205.694 + 221.96 + 216.312 + 167.352 = $811.3 Mil.
Total Current Assets was $494.5 Mil.
Total Assets was $828.4 Mil.
Property, Plant and Equipment(Net PPE) was $31.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.9 Mil.
Selling, General & Admin. Expense(SGA) was $230.9 Mil.
Total Current Liabilities was $188.0 Mil.
Long-Term Debt was $13.1 Mil.
Net Income was 74.31 + 89.983 + 94.441 + 69.123 = $327.9 Mil.
Non Operating Income was -0.154 + -0.06 + 0 + 0 = $-0.2 Mil.
Cash Flow from Operations was 106.074 + 105.931 + 108.856 + 81.539 = $402.4 Mil.
Accounts Receivable was $59.3 Mil.
Revenue was 135.129 + 160.532 + 140.339 + 112.452 = $548.5 Mil.
Gross Profit was 118.94 + 151.376 + 132.84 + 106.073 = $509.2 Mil.
Total Current Assets was $241.4 Mil.
Total Assets was $345.8 Mil.
Property, Plant and Equipment(Net PPE) was $35.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.1 Mil.
Selling, General & Admin. Expense(SGA) was $168.6 Mil.
Total Current Liabilities was $94.3 Mil.
Long-Term Debt was $16.1 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)
=(97.331 / 890.904) / (59.278 / 548.452)
=0.10924971 / 0.10808238
=1.0108

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)
=(221.96 / 548.452) / (205.694 / 890.904)
=0.92848417 / 0.91066827
=1.0196

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 - (494.48 + 31.25) / 828.396) / (1 - (241.437 + 35.742) / 345.753)
=0.36536391 / 0.19833234
=1.8422

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
=890.904 / 548.452
=1.6244

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))
=(3.066 / (3.066 + 35.742)) / (16.858 / (16.858 + 31.25))
=0.07900433 / 0.35041989
=0.2255

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)
=(230.947 / 890.904) / (168.587 / 548.452)
=0.25922771 / 0.30738697
=0.8433

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)
=((13.124 + 188.044) / 828.396) / ((16.062 + 94.295) / 345.753)
=0.24284038 / 0.31917872
=0.7608

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
=(327.857 - -0.214 - 402.4) / 828.396
=-0.0897

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.

Questcor Pharmaceuticals Inc has a M-score of -1.97 signals that the company is likely to 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.

Questcor Pharmaceuticals Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.83060.40112.72353.40670.23031.53550.57551.31840.94640.9037
GMI 0.93551.02171.01960.85650.96781.0030.98940.98680.99891.0408
AQI 0.75190.07154.77740.45861.41010.64110.71890.59561.73518.067
SGI 1.30870.76950.9033.89181.91380.92731.30361.8952.33441.5687
DEPI 0.99741.17631.94781.8370.33220.97531.40541.11160.93541.1994
SGAI 0.84871.12721.91030.26260.56941.67811.07060.94020.84980.903
LVGI 1.35641.1430.50880.85841.17921.30630.71730.97451.77260.6643
TATA -0.1025-0.1234-0.01710.3422-0.2586-0.1219-0.0098-0.0218-0.0846-0.0606
M-score -3.07-4.230.593.89-3.50-2.99-2.64-1.63-1.670.68

Questcor Pharmaceuticals Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.31841.52030.82090.89440.94640.72470.83860.84460.90371.0108
GMI 0.98680.99510.99590.99580.99891.01451.02561.03531.04081.0196
AQI 0.59560.61.03331.04391.73517.355413.139113.2898.0671.8422
SGI 1.8952.20572.39762.46782.33441.97781.80521.68891.56871.6244
DEPI 1.11160.78950.77160.83450.93544.50472.72121.80011.19940.2255
SGAI 0.94020.82480.76110.7840.84980.98540.97460.9350.90290.8433
LVGI 0.97450.94921.72011.94521.77261.41260.76970.52860.66430.7608
TATA -0.0218-0.0052-0.06940.0025-0.0846-0.0604-0.0586-0.073-0.0606-0.0897
M-score -1.63-1.09-1.93-1.53-1.670.703.012.890.68-1.97
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