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Teva Pharmaceutical Industries Ltd (NYSE:TEVA)
Beneish M-Score
0.00 (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.

Teva Pharmaceutical Industries Ltd has a M-score of signals that the company is a manipulator.

During the past 13 years, the highest Beneish M-Score of Teva Pharmaceutical Industries Ltd was -1.77. The lowest was -2.87. And the median was -2.43.


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 Teva Pharmaceutical Industries Ltd 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* 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 $5,350 Mil.
Revenue was 4881 + 4823 + 4966 + 4982 = $19,652 Mil.
Gross Profit was 2847 + 2771 + 2902 + 2836 = $11,356 Mil.
Total Current Assets was $18,398 Mil.
Total Assets was $54,258 Mil.
Property, Plant and Equipment(Net PPE) was $6,544 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $5,348 Mil.
Total Current Liabilities was $13,005 Mil.
Long-Term Debt was $8,383 Mil.
Net Income was 500 + 103 + 539 + 446 = $1,588 Mil.
Non Operating Income was 2281 + -2404 + -82 + 0 = $-205 Mil.
Cash Flow from Operations was 1615 + 1093 + 1480 + 1354 = $5,542 Mil.
Accounts Receivable was $5,408 Mil.
Revenue was 5168 + 5058 + 5045 + 5001 = $20,272 Mil.
Gross Profit was 2889 + 2809 + 2661 + 2697 = $11,056 Mil.
Total Current Assets was $14,396 Mil.
Total Assets was $46,420 Mil.
Property, Plant and Equipment(Net PPE) was $6,535 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $4,967 Mil.
Total Current Liabilities was $12,289 Mil.
Long-Term Debt was $8,566 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)
=(5350 / 19652) / (5408 / 20272)
=0.27223692 / 0.2667719
=

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)
=(2771 / 20272) / (2847 / 19652)
=0.54538279 / 0.57785467
=

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 - (18398 + 6544) / 54258) / (1 - (14396 + 6535) / 46420)
=0.54030742 / 0.54909522
=

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
=19652 / 20272
=

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))
=(0 / (0 + 6535)) / (0 / (0 + 6544))
=0 / 0
=

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)
=(5348 / 19652) / (4967 / 20272)
=0.27213515 / 0.24501776
=

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)
=((8383 + 13005) / 54258) / ((8566 + 12289) / 46420)
=0.39419072 / 0.44926756
=

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
=(1588 - -205 - 5542) / 54258
=-0.0691

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.

Teva Pharmaceutical Industries Ltd has a M-score of 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.

Teva Pharmaceutical Industries Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.03141.08461.11370.86030.94070.99880.80830.95811.01521.0205
GMI 0.93290.97710.96291.01570.94261.08220.99110.99470.96640.9438
AQI 1.5330.90731.14610.96981.0881.04030.93071.03530.96070.984
SGI 1.60151.11891.17831.25391.15991.13591.10950.99990.99790.9694
DEPI 0.92230.95711.45920.60541.06061.20210.71571.07311.05811.1255
SGAI 1.22851.08071.12111.11130.94451.01291.04581.33750.72741.1107
LVGI 1.0890.88061.14410.83491.01721.3181.01930.96790.95490.8774
TATA -0.078-0.0008-0.0789-0.0413-0.0205-0.028-0.0509-0.0246-0.0312-0.036
M-score -2.18-2.33-2.56-2.59-2.47-2.51-2.88-2.66-2.58-2.66

Teva Pharmaceutical Industries Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.9250.95810.95970.99161.0218
GMI 0.98430.99470.99780.99490.9772
AQI 1.00421.03531.00330.99490.9777
SGI 0.97050.99991.01481.02441.0199
DEPI 1.05241.07311.26421.77113.1635
SGAI 1.06091.03961.0090.98410.9721
LVGI 0.98760.96790.99530.93680.9465
TATA -0.0551-0.0382-0.0319-0.0068-0.0002
M-score -2.84-2.67-2.62-2.39-2.19
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