Switch to:
GuruFocus has detected 2 Warning Signs with Alexion Pharmaceuticals Inc $ALXN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Alexion Pharmaceuticals Inc (NAS:ALXN)
Beneish M-Score
-2.62 (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.

Alexion Pharmaceuticals Inc has a M-score of -2.62 suggests that the company is not a manipulator.

ALXN' s Beneish M-Score Range Over the Past 10 Years
Min: -5.1   Max: 38.17
Current: -2.62

-5.1
38.17

During the past 13 years, the highest Beneish M-Score of Alexion Pharmaceuticals Inc was 38.17. The lowest was -5.10. And the median was -2.35.


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 Alexion Pharmaceuticals Inc 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 * 0.936+0.528 * 1.0001+0.404 * 0.9182+0.892 * 1.2027+0.115 * 0.9754
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8997+4.679 * -0.0552-0.327 * 0.9442
=-2.62

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $660 Mil.
Revenue was 870 + 830.74 + 799.106 + 753.116 = $3,253 Mil.
Gross Profit was 801 + 763.448 + 728.011 + 692.489 = $2,985 Mil.
Total Current Assets was $2,733 Mil.
Total Assets was $13,435 Mil.
Property, Plant and Equipment(Net PPE) was $1,138 Mil.
Depreciation, Depletion and Amortization(DDA) was $398 Mil.
Selling, General & Admin. Expense(SGA) was $983 Mil.
Total Current Liabilities was $837 Mil.
Long-Term Debt was $3,116 Mil.
Net Income was 170 + 92.436 + 94.338 + 114.943 = $472 Mil.
Non Operating Income was 2 + -9.309 + 3.615 + -2.82 = $-7 Mil.
Cash Flow from Operations was 308 + 382.696 + 291.387 + 237.917 = $1,220 Mil.
Accounts Receivable was $586 Mil.
Revenue was 701 + 700.82 + 666.637 + 636.21 = $2,705 Mil.
Gross Profit was 642 + 643.283 + 612.58 + 584.203 = $2,482 Mil.
Total Current Assets was $2,128 Mil.
Total Assets was $12,802 Mil.
Property, Plant and Equipment(Net PPE) was $749 Mil.
Depreciation, Depletion and Amortization(DDA) was $253 Mil.
Selling, General & Admin. Expense(SGA) was $909 Mil.
Total Current Liabilities was $604 Mil.
Long-Term Debt was $3,386 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)
=(660 / 3252.962) / (586.249 / 2704.667)
=0.20289201 / 0.21675459
=0.936

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)
=(2482.066 / 2704.667) / (2984.948 / 3252.962)
=0.91769745 / 0.91760924
=1.0001

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 - (2733 + 1138) / 13435) / (1 - (2127.509 + 749.295) / 12802.445)
=0.71187198 / 0.77529261
=0.9182

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
=3252.962 / 2704.667
=1.2027

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))
=(253.422 / (253.422 + 749.295)) / (398 / (398 + 1138))
=0.25273532 / 0.25911458
=0.9754

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)
=(983.439 / 3252.962) / (908.884 / 2704.667)
=0.30232108 / 0.33604285
=0.8997

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)
=((3116 + 837) / 13435) / ((3385.742 + 603.613) / 12802.445)
=0.29423148 / 0.31160884
=0.9442

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
=(471.717 - -6.514 - 1220) / 13435
=-0.0552

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.

Alexion Pharmaceuticals Inc has a M-score of -2.62 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 local exchange's currency.

Alexion Pharmaceuticals Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.69120.44751.02291.06080.99970.83591.0430.71281.05631.0297
GMI 1.10251.01861.00791.0030.99970.94161.05670.96031.01270.9936
AQI 0.4281.71522.48910.63621.02691.76690.76910.86093.160.9541
SGI 46.23943.59651.49291.39851.44821.44761.36791.441.16561.1843
DEPI 1.91740.87460.73270.79370.92380.76181.00951.16690.55360.699
SGAI 0.03790.38620.86660.93850.93840.86230.93070.89331.17520.9334
LVGI 1.13490.6810.25731.16111.1561.08021.16120.84031.82470.9474
TATA 0.114-0.04140.2356-0.0607-0.0663-0.0591-0.07340.0045-0.0406-0.0515
M-score 38.17-0.37-0.08-2.56-2.43-2.26-2.56-2.32-1.94-2.56

Alexion Pharmaceuticals Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.71280.87750.97690.97351.05631.02430.96381.11951.02970.936
GMI 0.96030.99371.0021.00571.01270.98860.98780.99360.99371.0001
AQI 0.86090.93752.89642.96663.163.05220.98690.96130.95410.9182
SGI 1.441.27471.24461.20561.16561.19271.17991.18021.18431.2027
DEPI 1.16691.28391.33780.78320.55360.39110.28970.43670.6990.9754
SGAI 0.89331.05771.10231.14821.17521.10791.03920.98660.93380.8997
LVGI 0.84031.10722.25522.05331.82471.97850.95340.9770.94740.9442
TATA 0.0045-0.0233-0.0175-0.0411-0.0402-0.0528-0.0561-0.0391-0.0516-0.0552
M-score -2.32-2.50-1.99-2.11-1.94-2.12-2.70-2.47-2.56-2.62
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

FEEDBACK