Novo Nordisk AS (CHIX:NOVOBC) Beneish M-Score : -2.60 (As of Dec. 11, 2024)

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What is Novo Nordisk AS Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.6 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Novo Nordisk AS's Beneish M-Score or its related term are showing as below:

CHIX:NOVOBc' s Beneish M-Score Range Over the Past 10 Years
Min: -3.35 Med: -2.59 Max: -2.16
Current: -2.6

During the past 13 years, the highest Beneish M-Score of Novo Nordisk AS was -2.16. The lowest was -3.35. And the median was -2.59.

Novo Nordisk AS Beneish M-Score Historical Data

The historical data trend for Novo Nordisk AS's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Novo Nordisk AS Beneish M-Score Chart

Novo Nordisk AS Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.66

-2.31

-2.16

-2.74

-2.58

Novo Nordisk AS Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.77	-2.58	-2.28	-2.76	-2.60

Competitive Comparison of Novo Nordisk AS's Beneish M-Score

For the Drug Manufacturers - General subindustry, Novo Nordisk AS's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Novo Nordisk AS's Beneish M-Score Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Novo Nordisk AS's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Novo Nordisk AS's Beneish M-Score falls into.

Novo Nordisk AS Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Novo Nordisk AS for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0187

0.528 * 0.9939

0.404 * 0.8144

0.892 * 1.2615

0.115 * 0.7608

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8973

4.679 * -0.059121

0.327 * 1.0192

-2.60

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was kr79,629 Mil.
Revenue was 71311 + 68060 + 65349 + 65863 = kr270,583 Mil.
Gross Profit was 60003 + 57786 + 55433 + 55849 = kr229,071 Mil.
Total Current Assets was kr195,160 Mil.
Total Assets was kr397,441 Mil.
Property, Plant and Equipment(Net PPE) was kr119,832 Mil.
Depreciation, Depletion and Amortization(DDA) was kr16,901 Mil.
Selling, General, & Admin. Expense(SGA) was kr65,722 Mil.
Total Current Liabilities was kr208,358 Mil.
Long-Term Debt & Capital Lease Obligation was kr51,452 Mil.
Net Income was 27301 + 20050 + 25407 + 21963 = kr94,721 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = kr0 Mil.
Cash Flow from Operations was 43850 + 50503 + 14314 + 9551 = kr118,218 Mil.

Total Receivables was kr61,964 Mil.
Revenue was 58731 + 54300 + 53367 + 48092 = kr214,490 Mil.
Gross Profit was 49018 + 46444 + 45185 + 39830 = kr180,477 Mil.
Total Current Assets was kr142,199 Mil.
Total Assets was kr300,101 Mil.
Property, Plant and Equipment(Net PPE) was kr81,461 Mil.
Depreciation, Depletion and Amortization(DDA) was kr8,456 Mil.
Selling, General, & Admin. Expense(SGA) was kr58,063 Mil.
Total Current Liabilities was kr172,552 Mil.
Long-Term Debt & Capital Lease Obligation was kr19,924 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(79629 / 270583)	/	(61964 / 214490)
	=	0.294287	/	0.28889
	=	1.0187

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)
	=	(180477 / 214490)	/	(229071 / 270583)
	=	0.841424	/	0.846583
	=	0.9939

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (195160 + 119832) / 397441)	/	(1 - (142199 + 81461) / 300101)
	=	0.20745	/	0.254718
	=	0.8144

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	270583	/	214490
	=	1.2615

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(8456 / (8456 + 81461))	/	(16901 / (16901 + 119832))
	=	0.094042	/	0.123606
	=	0.7608

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(65722 / 270583)	/	(58063 / 214490)
	=	0.24289	/	0.270703
	=	0.8973

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((51452 + 208358) / 397441)	/	((19924 + 172552) / 300101)
	=	0.653707	/	0.641371
	=	1.0192

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
	=	(94721 - 0	-	118218)	/	397441
	=	-0.059121

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Novo Nordisk AS has a M-score of -2.60 suggests that the company is unlikely to be a manipulator.

Novo Nordisk AS Beneish M-Score Related Terms

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Novo Nordisk AS Business Description

Industry

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Traded in Other Exchanges

NONOF:USA NVO:USA NOVOB:Mexico NVO:Mexico 0TDD:UK 0QIU:UK NOVO B:Denmark NOV:Germany NOV:Germany NOVA:Germany NOV:Germany NOV:Germany NOVA:Germany N1VO34:Brazil NOV:Bulgaria NNO2:Austria

Address

Novo Alle 1, Bagsvaerd, DNK, 2880

Website

https://www.novonordisk.com

With roughly one third of the global branded diabetes treatment market, Novo Nordisk is the leading provider of diabetes-care products in the world. Based in Denmark, the company manufactures and markets a variety of human and modern insulins, injectable diabetes treatments such as GLP-1 therapy, oral antidiabetic agents, and obesity treatments. Novo also has a biopharmaceutical segment (constituting roughly 10% of revenue) that specializes in protein therapies for hemophilia and other disorders.

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