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Vivus (NAS:VVUS)
Beneish M-Score
0.05 (As of Today)

Warning Sign:

Beneish M-Score 0.05 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Vivus has a M-score of 0.05 signals that the company is a manipulator.

VVUS' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 10000000
Current: 0.05

-10000000
10000000

During the past 13 years, the highest Beneish M-Score of Vivus was 10000000.00. The lowest was -10000000.00. And the median was -2.18.


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 Vivus 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 * 1.1749+0.528 * 1.1861+0.404 * 1.0759+0.892 * 3.5005+0.115 * 0.5604
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.2006+4.679 * -0.0091-0.327 * 1.1032
=0.05

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $27.10 Mil.
Revenue was 33.877 + 21.881 + 36.691 + 44.057 = $136.51 Mil.
Gross Profit was 26.609 + 14.866 + 27.158 + 40.892 = $109.53 Mil.
Total Current Assets was $382.46 Mil.
Total Assets was $391.82 Mil.
Property, Plant and Equipment(Net PPE) was $1.51 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.95 Mil.
Selling, General & Admin. Expense(SGA) was $121.27 Mil.
Total Current Liabilities was $57.74 Mil.
Long-Term Debt was $217.11 Mil.
Net Income was -15.825 + -25.825 + -15.55 + -17.164 = $-74.36 Mil.
Non Operating Income was -16.27 + -16.682 + -16.116 + 24.337 = $-24.73 Mil.
Cash Flow from Operations was -14.107 + 7.062 + -24.917 + -14.113 = $-46.08 Mil.
Accounts Receivable was $6.59 Mil.
Revenue was 27.379 + 5.534 + 4.112 + 1.971 = $39.00 Mil.
Gross Profit was 26.638 + 4.962 + 3.722 + 1.788 = $37.11 Mil.
Total Current Assets was $411.64 Mil.
Total Assets was $422.48 Mil.
Property, Plant and Equipment(Net PPE) was $2.97 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.82 Mil.
Selling, General & Admin. Expense(SGA) was $172.69 Mil.
Total Current Liabilities was $58.99 Mil.
Long-Term Debt was $209.64 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)
=(27.099 / 136.506) / (6.589 / 38.996)
=0.19851875 / 0.16896605
=1.1749

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)
=(14.866 / 38.996) / (26.609 / 136.506)
=0.95163607 / 0.80234568
=1.1861

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 - (382.46 + 1.506) / 391.823) / (1 - (411.636 + 2.968) / 422.478)
=0.02005242 / 0.01863766
=1.0759

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
=136.506 / 38.996
=3.5005

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))
=(0.82 / (0.82 + 2.968)) / (0.948 / (0.948 + 1.506))
=0.21647307 / 0.38630807
=0.5604

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)
=(121.272 / 136.506) / (172.686 / 38.996)
=0.88840051 / 4.42830034
=0.2006

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)
=((217.11 + 57.742) / 391.823) / ((209.642 + 58.989) / 422.478)
=0.7014698 / 0.63584613
=1.1032

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
=(-74.364 - -24.731 - -46.075) / 391.823
=-0.0091

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.

Vivus has a M-score of 0.05 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.

Vivus Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 8.41311.06570.30390.52933.5675119.51820.1091
GMI 1.41231.71030.39550.8821.1601110.83920.965
AQI 0.572200.39162.80870.309100-0-6.15469837634E+13
SGI 0.71440.74763.17181.8690.4895000.040240.2992
DEPI 0.86691.81720.87810.87640.88890.42450.6751.33780.3669
SGAI 1.66891.35880.37570.58212.273111129.67760.0358
LVGI 2.07451.35711.8210.67920.51050.46070.39050.84433.9354
TATA 0.0197-0.0675-0.65410.30.18190.0392-0.0403-0.0291-0.0923
M-score 3.74-3.07-4.980.100.01-3.48-3.80-18.17-24,864,981,440,395.09

Vivus Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.10910.34330.23431.1749
GMI 0.9651.03311.06971.1861
AQI -6.15469837634E+132.82610.73761.0759
SGI 40.299218.559911.15183.5005
DEPI 0.36690.36050.44330.5604
SGAI 0.0360.05430.07120.2006
LVGI 3.93543.7761.18741.1032
TATA -0.0923-0.0542-0.1001-0.0091
M-score -24,864,981,440,395.0912.265.370.05
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