Merck Beneish M-Score Historical Data
The historical data trend for Merck'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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Merck Annual Data
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Trend |
Dec13 |
Dec14 |
Dec15 |
Dec16 |
Dec17 |
Dec18 |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
| Beneish M-Score |
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|
|
|
|
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-2.79 |
-2.71 |
-2.66 |
-2.24 |
-2.58 |
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Merck Quarterly Data
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Sep18 |
Dec18 |
Mar19 |
Jun19 |
Sep19 |
Dec19 |
Mar20 |
Jun20 |
Sep20 |
Dec20 |
Mar21 |
Jun21 |
Sep21 |
Dec21 |
Mar22 |
Jun22 |
Sep22 |
Dec22 |
Mar23 |
Jun23 |
| Beneish M-Score |
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|
|
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|
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-2.32 |
-2.48 |
-2.58 |
-2.54 |
-2.94 |
Competitive Comparison
For the Drug Manufacturers - General subindustry, Merck'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.
Merck Beneish M-Score Distribution
For the Drug Manufacturers industry and Healthcare sector, Merck's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Merck's Beneish M-Score falls into.
Merck 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 Merck 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 * 1.1214 | + | 0.528 * 0.9649 | + | 0.404 * 0.9755 | + | 0.892 * 1.02 | + | 0.115 * 1.0683 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0184 | + | 4.679 * -0.111325 | - | 0.327 * 1.1361 |
| = | -2.94 |
* 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.
| This Year (Jun23) TTM: | Last Year (Jun22) TTM: |
Total Receivables was $11,030 Mil.
Revenue was 15035 + 14487 + 13830 + 14959 = $58,311 Mil.
Gross Profit was 11011 + 10561 + 9949 + 11025 = $42,546 Mil.
Total Current Assets was $29,977 Mil.
Total Assets was $104,469 Mil.
Property, Plant and Equipment(Net PPE) was $22,231 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,745 Mil.
Selling, General, & Admin. Expense(SGA) was $10,388 Mil.
Total Current Liabilities was $23,394 Mil.
Long-Term Debt & Capital Lease Obligation was $34,072 Mil.
Net Income was -5975 + 2821 + 3017 + 3248 = $3,111 Mil.
Non Operating Income was -155 + -26 + 166 + -319 = $-334 Mil.
Cash Flow from Operations was 3704 + 1339 + 4430 + 5602 = $15,075 Mil.
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Total Receivables was $9,643 Mil.
Revenue was 14593 + 15901 + 13521 + 13154 = $57,169 Mil.
Gross Profit was 10377 + 10521 + 9647 + 9704 = $40,249 Mil.
Total Current Assets was $32,116 Mil.
Total Assets was $107,095 Mil.
Property, Plant and Equipment(Net PPE) was $20,059 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,652 Mil.
Selling, General, & Admin. Expense(SGA) was $10,001 Mil.
Total Current Liabilities was $23,168 Mil.
Long-Term Debt & Capital Lease Obligation was $28,684 Mil.
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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) |
| = | (11030 / 58311) | / | (9643 / 57169) |
| = | 0.189158 | / | 0.168675 |
| | = | 1.1214 |
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) |
| = | (40249 / 57169) | / | (42546 / 58311) |
| = | 0.704035 | / | 0.729639 |
| | = | 0.9649 |
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 - (29977 + 22231) / 104469) | / | (1 - (32116 + 20059) / 107095) |
| = | 0.500254 | / | 0.512816 |
| | = | 0.9755 |
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 |
| = | 58311 | / | 57169 |
| | = | 1.02 |
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)) |
| = | (3652 / (3652 + 20059)) | / | (3745 / (3745 + 22231)) |
| = | 0.154021 | / | 0.144172 |
| | = | 1.0683 |
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) |
| = | (10388 / 58311) | / | (10001 / 57169) |
| = | 0.178148 | / | 0.174937 |
| | = | 1.0184 |
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) |
| = | ((34072 + 23394) / 104469) | / | ((28684 + 23168) / 107095) |
| = | 0.550077 | / | 0.484168 |
| | = | 1.1361 |
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 |
| = | (3111 - -334 | - | 15075) | / | 104469 |
| | = | -0.111325 |
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.
Merck has a M-score of -2.94 suggests that the company is unlikely to be a manipulator.
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