Switch to:
Shire PLC (NAS:SHPG)
Beneish M-Score
-2.46 (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.

Shire PLC has a M-score of -2.51 suggests that the company is not a manipulator.

SHPG' s Beneish M-Score Range Over the Past 10 Years
Min: -4.23   Max: -2.29
Current: -2.46

-4.23
-2.29

During the past 13 years, the highest Beneish M-Score of Shire PLC was -2.29. The lowest was -4.23. And the median was -2.73.


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 Shire PLC 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 * 1.0891+0.528 * 0.9863+0.404 * 1.4585+0.892 * 1.0655+0.115 * 0.7524
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0846+4.679 * -0.0625-0.327 * 1.0255
=-2.51

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,201 Mil.
Revenue was 1715.7 + 1655 + 1557.6 + 1488.4 = $6,417 Mil.
Gross Profit was 1465.2 + 1392.3 + 1329.6 + 1260.6 = $5,448 Mil.
Total Current Assets was $2,256 Mil.
Total Assets was $16,610 Mil.
Property, Plant and Equipment(Net PPE) was $828 Mil.
Depreciation, Depletion and Amortization(DDA) was $637 Mil.
Selling, General & Admin. Expense(SGA) was $2,341 Mil.
Total Current Liabilities was $3,706 Mil.
Long-Term Debt was $70 Mil.
Net Income was 280.6 + 452.8 + 159.6 + 410.4 = $1,303 Mil.
Non Operating Income was -8.2 + 9.6 + -2 + 4.3 = $4 Mil.
Cash Flow from Operations was 761.8 + 561.3 + 452.3 + 561.6 = $2,337 Mil.
Accounts Receivable was $1,035 Mil.
Revenue was 1576.1 + 1597.1 + 1502.1 + 1346.8 = $6,022 Mil.
Gross Profit was 1357.6 + 1342.8 + 1225.1 + 1117.3 = $5,043 Mil.
Total Current Assets was $5,183 Mil.
Total Assets was $13,632 Mil.
Property, Plant and Equipment(Net PPE) was $838 Mil.
Depreciation, Depletion and Amortization(DDA) was $407 Mil.
Selling, General & Admin. Expense(SGA) was $2,026 Mil.
Total Current Liabilities was $3,022 Mil.
Long-Term Debt was $0 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)
=(1201.2 / 6416.7) / (1035.1 / 6022.1)
=0.18719903 / 0.17188356
=1.0891

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)
=(1392.3 / 6022.1) / (1465.2 / 6416.7)
=0.83738231 / 0.8489878
=0.9863

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 - (2255.5 + 828.1) / 16609.8) / (1 - (5183.1 + 837.5) / 13632.1)
=0.81435056 / 0.55835124
=1.4585

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
=6416.7 / 6022.1
=1.0655

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))
=(407.3 / (407.3 + 837.5)) / (637.2 / (637.2 + 828.1))
=0.32720116 / 0.43485976
=0.7524

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)
=(2341.2 / 6416.7) / (2025.8 / 6022.1)
=0.36486044 / 0.33639428
=1.0846

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)
=((69.9 + 3706.1) / 16609.8) / ((0 + 3021.9) / 13632.1)
=0.22733567 / 0.22167531
=1.0255

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
=(1303.4 - 3.7 - 2337) / 16609.8
=-0.0625

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.

Shire PLC has a M-score of -2.51 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.

Shire PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.83871.04750.72121.521.00430.99350.91851.07010.88241.0891
GMI 1.00360.98921.00760.99311.00521.00510.99021.00761.03190.9863
AQI 0.881.42221.14470.85750.95951.03090.84760.87741.47861.4585
SGI 1.12331.35611.24050.99521.15411.22831.06191.08991.22051.0655
DEPI 0.89360.82191.15771.01991.17140.95890.98450.9150.81520.7524
SGAI 1.14040.94320.95910.94810.98510.93421.04740.77781.00521.0846
LVGI 1.10181.38130.9040.93710.95120.89120.94460.57891.02051.0255
TATA -0.0791-0.4452-0.1554-0.0424-0.0696-0.0355-0.0868-0.0954-0.181-0.0625
M-score -3.00-4.17-3.13-2.23-2.64-2.39-2.96-2.66-3.06-2.51

Shire PLC Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.07011.08040.96890.83890.88240.85270.90561.10421.08911.092
GMI 1.00761.0221.03761.04071.03191.01430.98670.98420.98630.9889
AQI 0.87741.55461.47491.53381.47861.1981.15551.17861.45851.0677
SGI 1.08991.1421.18581.23981.22051.19971.15441.08751.06551.0769
DEPI 0.9150.87890.79390.74790.81520.81150.81470.78230.75240.767
SGAI 0.77780.80440.86140.90411.00521.03691.08921.10441.08461.0797
LVGI 0.57890.86220.78670.72881.02050.90460.95341.00491.02551.338
TATA -0.0954-0.066-0.0912-0.0866-0.181-0.1472-0.1514-0.1476-0.0625-0.0351
M-score -2.66-2.29-2.49-2.51-3.06-3.04-3.10-2.98-2.51-2.62
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK