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Shire PLC (NAS:SHPG)
Beneish M-Score
-2.91 (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 -3.04 suggests that the company is not a manipulator.

SHPG' s 10-Year Beneish M-Score Range
Min: -5   Max: -2.21
Current: -2.91

-5
-2.21

During the past 13 years, the highest Beneish M-Score of Shire PLC was -2.21. The lowest was -5.00. And the median was -2.62.


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 * 0.8496+0.528 * 1.0157+0.404 * 1.198+0.892 * 1.204+0.115 * 0.8171
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0627+4.679 * -0.1472-0.327 * 0.9046
=-3.04

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,116 Mil.
Revenue was 1488.4 + 1576.1 + 1597.1 + 1502.1 = $6,164 Mil.
Gross Profit was 1260.6 + 1357.6 + 1342.8 + 1225.1 = $5,186 Mil.
Total Current Assets was $2,527 Mil.
Total Assets was $17,678 Mil.
Property, Plant and Equipment(Net PPE) was $822 Mil.
Depreciation, Depletion and Amortization(DDA) was $431 Mil.
Selling, General & Admin. Expense(SGA) was $2,102 Mil.
Total Current Liabilities was $4,865 Mil.
Long-Term Debt was $79 Mil.
Net Income was 410.4 + 2172.3 + 479.7 + 523.1 = $3,586 Mil.
Non Operating Income was 4.3 + 1629.5 + 6.8 + 3.3 = $1,644 Mil.
Cash Flow from Operations was 561.6 + 2554.9 + 593.4 + 834 = $4,544 Mil.
Accounts Receivable was $1,091 Mil.
Revenue was 1346.8 + 1261.3 + 1236.6 + 1274.5 = $5,119 Mil.
Gross Profit was 1117.3 + 1119.2 + 1039.5 + 1098.8 = $4,375 Mil.
Total Current Assets was $2,641 Mil.
Total Assets was $10,900 Mil.
Property, Plant and Equipment(Net PPE) was $884 Mil.
Depreciation, Depletion and Amortization(DDA) was $346 Mil.
Selling, General & Admin. Expense(SGA) was $1,643 Mil.
Total Current Liabilities was $2,520 Mil.
Long-Term Debt was $850 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)
=(1116.3 / 6163.7) / (1091.2 / 5119.2)
=0.18110875 / 0.21315831
=0.8496

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)
=(1357.6 / 5119.2) / (1260.6 / 6163.7)
=0.85458665 / 0.84139397
=1.0157

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 - (2526.6 + 821.9) / 17678.3) / (1 - (2641.2 + 884) / 10900.2)
=0.81058699 / 0.67659309
=1.198

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
=6163.7 / 5119.2
=1.204

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))
=(345.9 / (345.9 + 884)) / (431.4 / (431.4 + 821.9))
=0.28124238 / 0.34421128
=0.8171

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)
=(2102.1 / 6163.7) / (1642.9 / 5119.2)
=0.34104515 / 0.32092905
=1.0627

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)
=((78.7 + 4865) / 17678.3) / ((850 + 2519.6) / 10900.2)
=0.27964793 / 0.30913194
=0.9046

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
=(3585.5 - 1643.9 - 4543.9) / 17678.3
=-0.1472

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 -3.04 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.26350.83871.04750.72121.521.00430.99350.88831.10640.8824
GMI 1.03421.00360.98921.00760.99311.00521.00510.99990.99781.0319
AQI 1.73320.881.42221.14470.85750.95951.03090.84760.87741.4786
SGI 1.17321.12331.35611.24050.99521.15411.22831.0981.05411.2205
DEPI 1.3580.89360.82191.15771.01991.17140.95890.98450.9150.8152
SGAI 1.14071.14040.94320.95910.94810.98510.93421.09930.74111.0052
LVGI 2.28371.10181.38130.9040.93710.95120.89120.94460.57891.0205
TATA -0.3637-0.0994-0.4751-0.1554-0.0424-0.0696-0.0355-0.0868-0.0954-0.181
M-score -3.87-3.10-4.31-3.13-2.23-2.64-2.39-2.96-2.66-3.06

Shire PLC Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.88830.91721.09161.13961.10641.12591.01810.88820.88240.8496
GMI 0.99990.9981.00431.00690.99781.00911.02091.01851.03191.0157
AQI 0.84760.90110.97180.95170.87741.55461.47491.53381.47861.198
SGI 1.0981.04671.02821.05451.05411.09591.12851.17091.22051.204
DEPI 0.98451.00811.04081.04560.9150.87540.79390.74790.81520.8171
SGAI 1.09931.0611.01310.99730.74110.73030.74530.75181.00521.0627
LVGI 0.94460.94550.92310.93970.57890.86220.78670.72881.02050.9046
TATA -0.0868-0.0934-0.061-0.0683-0.0954-0.066-0.0912-0.0866-0.181-0.1472
M-score -2.96-2.98-2.64-2.61-2.66-2.28-2.48-2.51-3.06-3.04
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