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Questcor Pharmaceuticals Inc (NAS:QCOR)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

QCOR' s 10-Year Beneish M-Score Range
Min: -5.65   Max: 3.89
Current: -2.5

-5.65
3.89

During the past 13 years, the highest Beneish M-Score of Questcor Pharmaceuticals Inc was 3.89. The lowest was -5.65. And the median was -2.27.


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 * 0.9535+0.528 * 1.0067+0.404 * 0.5632+0.892 * 1.5875+0.115 * 0.3894
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9055+4.679 * -0.0715-0.327 * 0.8207
=-2.50

* 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 $107.0 Mil.
Revenue was 278.83 + 227.104 + 242.881 + 236.346 = $985.2 Mil.
Gross Profit was 255.678 + 205.694 + 221.96 + 216.312 = $899.6 Mil.
Total Current Assets was $595.2 Mil.
Total Assets was $907.8 Mil.
Property, Plant and Equipment(Net PPE) was $36.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $19.3 Mil.
Selling, General & Admin. Expense(SGA) was $263.6 Mil.
Total Current Liabilities was $187.7 Mil.
Long-Term Debt was $13.2 Mil.
Net Income was 96.436 + 74.31 + 89.983 + 94.441 = $355.2 Mil.
Non Operating Income was 0.06 + -0.154 + -0.06 + 0 = $-0.2 Mil.
Cash Flow from Operations was 99.357 + 106.074 + 105.931 + 108.856 = $420.2 Mil.
Accounts Receivable was $70.7 Mil.
Revenue was 184.573 + 135.129 + 160.532 + 140.339 = $620.6 Mil.
Gross Profit was 167.352 + 118.94 + 151.376 + 132.84 = $570.5 Mil.
Total Current Assets was $214.5 Mil.
Total Assets was $539.7 Mil.
Property, Plant and Equipment(Net PPE) was $33.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.3 Mil.
Selling, General & Admin. Expense(SGA) was $183.4 Mil.
Total Current Liabilities was $130.4 Mil.
Long-Term Debt was $15.1 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)
=(106.954 / 985.161) / (70.659 / 620.573)
=0.108565 / 0.1138609
=0.9535

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)
=(205.694 / 620.573) / (255.678 / 985.161)
=0.91932456 / 0.9131949
=1.0067

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 - (595.239 + 36.409) / 907.838) / (1 - (214.463 + 33.704) / 539.728)
=0.30422829 / 0.54019988
=0.5632

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
=985.161 / 620.573
=1.5875

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))
=(5.252 / (5.252 + 33.704)) / (19.284 / (19.284 + 36.409))
=0.13481877 / 0.34625536
=0.3894

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)
=(263.561 / 985.161) / (183.357 / 620.573)
=0.26753089 / 0.29546403
=0.9055

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)
=((13.181 + 187.734) / 907.838) / ((15.125 + 130.416) / 539.728)
=0.22131151 / 0.2696562
=0.8207

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
=(355.17 - -0.154 - 420.218) / 907.838
=-0.0715

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 -2.50 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.

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 0.99631.17761.94781.8371.85430.17481.40541.11160.93541.1994
SGAI 0.84871.12721.91030.26260.56941.67811.07060.94020.84980.903
LVGI 1.36091.13920.50880.85841.17921.30630.71730.97451.77260.6643
TATA -0.084-0.1234-0.01710.3422-0.2587-0.1219-0.0124-0.0218-0.0846-0.0606
M-score -2.98-4.220.593.89-3.32-3.08-2.65-1.63-1.670.68

Questcor Pharmaceuticals Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.52030.82090.89440.94640.72470.83860.84460.90371.01080.9535
GMI 0.99510.99590.99580.99891.01451.02561.03531.04081.01961.0067
AQI 0.61.03331.04391.73517.355413.139113.2898.0671.84220.5632
SGI 2.20572.39762.46782.33441.97781.80521.68891.56871.62441.5875
DEPI 0.78950.77160.83450.93544.50472.72121.80011.19940.22550.3894
SGAI 0.82480.76110.7840.84980.98540.97460.9350.90290.84330.9055
LVGI 0.94921.72011.94521.77261.41260.76970.52860.66430.76080.8207
TATA -0.0045-0.06940.0025-0.0846-0.0604-0.0586-0.073-0.0606-0.0897-0.0715
M-score -1.09-1.93-1.53-1.670.703.012.890.68-1.97-2.50
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