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Teva Pharmaceutical Industries Ltd (NYSE:TEVA)
Beneish M-Score
-2.66 (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 -2.66 suggests that the company is not a manipulator.

TEVA' s 10-Year Beneish M-Score Range
Min: -2.98   Max: -1.83
Current: -2.66

-2.98
-1.83

During the past 13 years, the highest Beneish M-Score of Teva Pharmaceutical Industries Ltd was -1.83. The lowest was -2.98. And the median was -2.46.


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 * 0.9597+0.528 * 0.9978+0.404 * 1.0033+0.892 * 1.0148+0.115 * 0.7917
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.009+4.679 * -0.0285-0.327 * 0.9953
=-2.66

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $5,275 Mil.
Revenue was 5001 + 5430 + 5059 + 4924 = $20,414 Mil.
Gross Profit was 2697 + 2894 + 2630 + 2593 = $10,814 Mil.
Total Current Assets was $13,448 Mil.
Total Assets was $46,892 Mil.
Property, Plant and Equipment(Net PPE) was $6,665 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,701 Mil.
Selling, General & Admin. Expense(SGA) was $5,303 Mil.
Total Current Liabilities was $11,402 Mil.
Long-Term Debt was $10,244 Mil.
Net Income was 744 + 380 + 711 + -452 = $1,383 Mil.
Non Operating Income was -162 + 0 + -152 + 0 = $-314 Mil.
Cash Flow from Operations was 898 + 816 + 444 + 875 = $3,033 Mil.
Accounts Receivable was $5,416 Mil.
Revenue was 4901 + 5249 + 4972 + 4994 = $20,116 Mil.
Gross Profit was 2590 + 2785 + 2601 + 2657 = $10,633 Mil.
Total Current Assets was $14,416 Mil.
Total Assets was $48,069 Mil.
Property, Plant and Equipment(Net PPE) was $6,291 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,479 Mil.
Selling, General & Admin. Expense(SGA) was $5,179 Mil.
Total Current Liabilities was $12,356 Mil.
Long-Term Debt was $9,938 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)
=(5275 / 20414) / (5416 / 20116)
=0.2584011 / 0.26923842
=0.9597

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)
=(2894 / 20116) / (2697 / 20414)
=0.52858421 / 0.5297345
=0.9978

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 - (13448 + 6665) / 46892) / (1 - (14416 + 6291) / 48069)
=0.57107822 / 0.56922341
=1.0033

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
=20414 / 20116
=1.0148

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))
=(2479 / (2479 + 6291)) / (3701 / (3701 + 6665))
=0.28266819 / 0.35703261
=0.7917

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)
=(5303 / 20414) / (5179 / 20116)
=0.25977271 / 0.25745675
=1.009

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)
=((10244 + 11402) / 46892) / ((9938 + 12356) / 48069)
=0.46161392 / 0.46379163
=0.9953

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
=(1383 - -314 - 3033) / 46892
=-0.0285

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 -2.66 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.

Teva Pharmaceutical Industries Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96021.06340.83691.08461.11370.86030.94070.99880.80830.9581
GMI 0.99360.98730.93290.97710.96291.01570.94261.08220.99110.9947
AQI 1.85860.78641.5330.90731.14610.96981.0881.04030.93071.0353
SGI 1.46471.0941.60151.11891.17831.25391.15991.13591.10950.9999
DEPI 0.91750.96190.92230.95711.45920.60541.06061.20210.71571.0731
SGAI 0.91411.04791.22851.08071.12111.11130.94451.01291.04581.0396
LVGI 0.90941.00611.0890.88061.14410.83491.01721.3181.01930.9679
TATA -0.0917-0.0289-0.0731-0.0007-0.0789-0.0413-0.0205-0.029-0.0509-0.0396
M-score -2.15-2.58-2.33-2.33-2.56-2.59-2.47-2.52-2.88-2.68

Teva Pharmaceutical Industries Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.99880.92960.83710.84810.80830.85960.98040.9250.95810.9597
GMI 1.08221.08651.06351.02960.99110.97220.97990.98430.99470.9978
AQI 1.04031.0121.03211.03850.93070.97650.97421.00421.03531.0033
SGI 1.13591.16841.18611.21641.10951.04040.99650.97050.99991.0148
DEPI 1.20211.00840.8770.72570.52090.63160.69540.74751.09150.7917
SGAI 1.01290.99560.96321.01211.04581.08281.08221.06091.03961.009
LVGI 1.3181.34411.33121.22491.01930.98421.03490.98760.96790.9953
TATA -0.029-0.0241-0.0162-0.0446-0.0487-0.0632-0.085-0.0551-0.0382-0.0285
M-score -2.52-2.57-2.61-2.71-2.89-2.94-2.98-2.88-2.67-2.66
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