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Teva Pharmaceutical Industries Ltd (NYSE:TEVA)
Beneish M-Score
-2.88 (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 -2.88 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: -2.88

-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 * 0.9793+0.528 * 0.952+0.404 * 1.0778+0.892 * 0.9618+0.115 * 0.3102
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1142+4.679 * -0.065-0.327 * 0.8387
=-2.88

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $5,188 Mil.
Revenue was 4810 + 4881 + 4823 + 4966 = $19,480 Mil.
Gross Profit was 2791 + 2847 + 2771 + 2902 = $11,311 Mil.
Total Current Assets was $16,994 Mil.
Total Assets was $55,126 Mil.
Property, Plant and Equipment(Net PPE) was $6,632 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,278 Mil.
Selling, General & Admin. Expense(SGA) was $5,262 Mil.
Total Current Liabilities was $12,905 Mil.
Long-Term Debt was $8,619 Mil.
Net Income was 636 + 500 + 103 + 539 = $1,778 Mil.
Non Operating Income was 0 + 2281 + -2404 + -82 = $-205 Mil.
Cash Flow from Operations was 1376 + 1615 + 1093 + 1480 = $5,564 Mil.
Accounts Receivable was $5,508 Mil.
Revenue was 4982 + 5168 + 5058 + 5045 = $20,253 Mil.
Gross Profit was 2836 + 2889 + 2809 + 2661 = $11,195 Mil.
Total Current Assets was $15,711 Mil.
Total Assets was $46,951 Mil.
Property, Plant and Equipment(Net PPE) was $6,349 Mil.
Depreciation, Depletion and Amortization(DDA) was $335 Mil.
Selling, General & Admin. Expense(SGA) was $4,910 Mil.
Total Current Liabilities was $12,467 Mil.
Long-Term Debt was $9,391 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)
=(5188 / 19480) / (5508 / 20253)
=0.26632444 / 0.27195971
=0.9793

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)
=(11195 / 20253) / (11311 / 19480)
=0.55275762 / 0.58064682
=0.952

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 - (16994 + 6632) / 55126) / (1 - (15711 + 6349) / 46951)
=0.57141821 / 0.53014845
=1.0778

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
=19480 / 20253
=0.9618

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))
=(335 / (335 + 6349)) / (1278 / (1278 + 6632))
=0.05011969 / 0.16156764
=0.3102

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)
=(5262 / 19480) / (4910 / 20253)
=0.2701232 / 0.24243322
=1.1142

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)
=((8619 + 12905) / 55126) / ((9391 + 12467) / 46951)
=0.39045097 / 0.46554919
=0.8387

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
=(1778 - -205 - 5564) / 55126
=-0.065

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 -2.88 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 1.03151.08461.11370.86030.94070.99880.80830.95811.01521.0205
GMI 0.93270.97710.96291.01570.94261.08220.99110.99470.96640.9438
AQI 1.5330.90731.14610.96981.0881.04030.93071.03530.96070.984
SGI 1.60141.11891.17831.25391.15991.13591.10950.99990.99790.9694
DEPI 0.92070.95711.45920.60541.06061.20210.71571.07311.05811.1255
SGAI 1.22891.08071.12111.11130.94451.01291.04581.03960.95671.0864
LVGI 1.0890.88061.14410.83491.01721.3181.01930.96790.95490.8774
TATA -0.078-0.0008-0.0789-0.0422-0.0211-0.0274-0.0509-0.0396-0.0444-0.036
M-score -2.18-2.33-2.56-2.59-2.47-2.51-2.88-2.68-2.68-2.65

Teva Pharmaceutical Industries Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.95810.95970.99161.02181.05251.05171.00411.02050.9793
GMI 0.99470.99780.99490.97720.95830.93480.94230.94380.952
AQI 1.03531.00330.99490.97770.92831.07381.08940.9841.0778
SGI 0.99991.01481.02441.01990.99210.98240.9710.96940.9618
DEPI 1.07311.26421.77113.16353.16161.21710.474300.3102
SGAI 1.03961.0090.98410.97210.93330.94910.93581.11071.1142
LVGI 0.96790.99530.93680.94651.00851.06021.05240.87740.8387
TATA -0.0382-0.0319-0.0068-0.0002-0.0907-0.0986-0.0882-0.0691-0.065
M-score -2.67-2.62-2.39-2.19-2.66-2.90-2.98-2.94-2.88
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