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Sanofi (NYSE:SNY)
Beneish M-Score
-2.35 (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.

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

SNY' s 10-Year Beneish M-Score Range
Min: -3.47   Max: 1.7
Current: -2.35

-3.47
1.7

During the past 13 years, the highest Beneish M-Score of Sanofi was 1.70. The lowest was -3.47. And the median was -2.37.


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 Sanofi 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 * 0.9437+0.528 * 0.9871+0.404 * 1.005+0.892 * 0.9524+0.115 * 1.0572
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.055+4.679 * 0.0176-0.327 * 1.0313
=-2.51

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $8,715 Mil.
Revenue was 10618.4062851 + 9621.21212121 + 11307.02836 + 11427.8350515 = $42,974 Mil.
Gross Profit was 7320.98765432 + 6606.06060606 + 7557.33662145 + 7737.11340206 = $29,221 Mil.
Total Current Assets was $24,701 Mil.
Total Assets was $109,902 Mil.
Property, Plant and Equipment(Net PPE) was $11,829 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,381 Mil.
Selling, General & Admin. Expense(SGA) was $11,625 Mil.
Total Current Liabilities was $18,288 Mil.
Long-Term Debt was $12,088 Mil.
Net Income was 1461.27946128 + 1107.14285714 + 1651.04808878 + 1533.50515464 = $5,753 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 3821.54882155 + 0 + 0 + 0 = $3,822 Mil.
Accounts Receivable was $9,697 Mil.
Revenue was 11067.9347826 + 10961.2724758 + 11721.5363512 + 11372.4966622 = $45,123 Mil.
Gross Profit was 7524.45652174 + 7481.32780083 + 7740.74074074 + 7539.3858478 = $30,286 Mil.
Total Current Assets was $27,675 Mil.
Total Assets was $123,261 Mil.
Property, Plant and Equipment(Net PPE) was $13,709 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,483 Mil.
Selling, General & Admin. Expense(SGA) was $11,571 Mil.
Total Current Liabilities was $19,293 Mil.
Long-Term Debt was $13,740 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)
=(8714.92704826 / 42974.4818179) / (9697.01086957 / 45123.2402718)
=0.20279307 / 0.21490059
=0.9437

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)
=(6606.06060606 / 45123.2402718) / (7320.98765432 / 42974.4818179)
=0.67118209 / 0.67997326
=0.9871

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 - (24701.4590348 + 11829.4051627) / 109902.356902) / (1 - (27675.2717391 + 13709.2391304) / 123260.869565)
=0.66760618 / 0.66425265
=1.005

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
=42974.4818179 / 45123.2402718
=0.9524

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))
=(5483.37360883 / (5483.37360883 + 13709.2391304)) / (4380.72449036 / (4380.72449036 + 11829.4051627))
=0.2857023 / 0.27024611
=1.0572

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)
=(11625.442701 / 42974.4818179) / (11570.7446307 / 45123.2402718)
=0.27051967 / 0.25642539
=1.055

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)
=((12087.5420875 + 18288.4399551) / 109902.356902) / ((13740.4891304 + 19293.4782609) / 123260.869565)
=0.27639063 / 0.26800044
=1.0313

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
=(5752.97556184 - 0 - 3821.54882155) / 109902.356902
=0.0176

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.

Sanofi 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.

Sanofi Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.6220.9690.9841.0961.0630.97731.19990.91010.98241.0219
GMI 0.97710.98921.00260.99381.00221.02741.0490.99821.03190.9902
AQI 0.98360.98160.96190.93850.99220.97851.0260.97210.96631.0119
SGI 1.60371.15261.09130.9161.1511.00441.02461.0230.96820.9206
DEPI 0.56250.98931.19060.90061.18471.01071.13361.07490.89631.3267
SGAI 0.98970.93990.9510.96170.95771.00511.01361.02351.03991.0337
LVGI 0.83140.81910.98081.00761.12320.93321.31530.94451.03641.0659
TATA -0.0438-0.0383-0.0256-0.0649-0.0405-0.0515-0.0365-0.0327-0.0337-0.0339
M-score -2.51-2.50-2.51-2.81-2.49-2.71-2.50-2.68-2.71-2.68

Sanofi Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.044910.952210.9437
GMI 1.02481.03221.01120.98940.9871
AQI 0.99170.96630.97951.01181.005
SGI 0.9350.95291.01381.00980.9524
DEPI 0.99671.00571.12991.08981.0572
SGAI 1.09281.03990.97511.0341.055
LVGI 0.96841.03641.06891.06481.0313
TATA 0.01320.0173-0.0049-0.00410.0176
M-score -2.43-2.46-2.54-2.51-2.51
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