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Teva Pharmaceutical Industries Ltd (NYSE:TEVA)
Beneish M-Score
-2.77 (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 -2.77 suggests that the company is not a manipulator.

TEVA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.11   Max: -1.61
Current: -2.77

-3.11
-1.61

During the past 13 years, the highest Beneish M-Score of Teva Pharmaceutical Industries Ltd was -1.61. The lowest was -3.11. And the median was -2.51.


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 * 0.9959+0.528 * 0.982+0.404 * 0.9332+0.892 * 0.9692+0.115 * 1.1173
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1309+4.679 * -0.0592-0.327 * 0.8144
=-2.77

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $5,374 Mil.
Revenue was 5038 + 4810 + 4881 + 4823 = $19,552 Mil.
Gross Profit was 2877 + 2791 + 2847 + 2771 = $11,286 Mil.
Total Current Assets was $18,344 Mil.
Total Assets was $57,920 Mil.
Property, Plant and Equipment(Net PPE) was $6,693 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,265 Mil.
Selling, General & Admin. Expense(SGA) was $5,340 Mil.
Total Current Liabilities was $14,411 Mil.
Long-Term Debt was $8,036 Mil.
Net Income was 254 + 636 + 500 + 103 = $1,493 Mil.
Non Operating Income was 0 + 0 + 2281 + -2404 = $-123 Mil.
Cash Flow from Operations was 963 + 1376 + 1615 + 1093 = $5,047 Mil.
Accounts Receivable was $5,568 Mil.
Revenue was 4966 + 4982 + 5168 + 5058 = $20,174 Mil.
Gross Profit was 2902 + 2836 + 2889 + 2809 = $11,436 Mil.
Total Current Assets was $13,299 Mil.
Total Assets was $50,371 Mil.
Property, Plant and Equipment(Net PPE) was $6,427 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,388 Mil.
Selling, General & Admin. Expense(SGA) was $4,872 Mil.
Total Current Liabilities was $14,473 Mil.
Long-Term Debt was $9,496 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)
=(5374 / 19552) / (5568 / 20174)
=0.27485679 / 0.27599881
=0.9959

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)
=(11436 / 20174) / (11286 / 19552)
=0.56686825 / 0.57722995
=0.982

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 - (18344 + 6693) / 57920) / (1 - (13299 + 6427) / 50371)
=0.56773135 / 0.60838578
=0.9332

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
=19552 / 20174
=0.9692

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))
=(1388 / (1388 + 6427)) / (1265 / (1265 + 6693))
=0.17760717 / 0.15895954
=1.1173

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)
=(5340 / 19552) / (4872 / 20174)
=0.27311784 / 0.24149896
=1.1309

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)
=((8036 + 14411) / 57920) / ((9496 + 14473) / 50371)
=0.3875518 / 0.4758492
=0.8144

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
=(1493 - -123 - 5047) / 57920
=-0.0592

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 -2.77 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

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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.95970.99161.02181.01521.05251.05171.00411.02050.97930.9959
GMI 0.99780.99490.97720.96640.95830.93480.94230.94380.9520.982
AQI 1.00330.99490.97770.96070.92831.07381.08940.9841.07780.9332
SGI 1.01481.02441.01990.99790.99210.98240.9710.96940.96180.9692
DEPI 1.8611.92661.03720.56550.58260.58510.85691.12551.14361.1173
SGAI 1.0090.98410.97210.93580.93330.94910.93581.11071.11421.1309
LVGI 0.99530.93680.94650.95491.00851.06021.05240.87740.83870.8144
TATA -0.0319-0.0068-0.0002-0.0755-0.0907-0.1003-0.0899-0.0706-0.0664-0.0592
M-score -2.55-2.37-2.44-2.88-2.95-2.98-2.94-2.82-2.79-2.77
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