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NovoCure (NAS:NVCR) Beneish M-Score

: -3.19 (As of Today)
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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 -3.19 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

NVCR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.19   Med: -2.75   Max: -1.86
Current: -3.19

During the past 11 years, the highest Beneish M-Score of NovoCure was -1.86. The lowest was -3.19. And the median was -2.75.


NovoCure Beneish M-Score Historical Data

The historical data trend for NovoCure'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.

* Premium members only.

NovoCure Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.99 -2.51 -3.17 -3.01 -3.19

NovoCure Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.01 -3.32 -3.19 -3.14 -3.19

Competitive Comparison

For the Medical Devices subindustry, NovoCure'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.


NovoCure Beneish M-Score Distribution

For the Medical Devices & Instruments industry and Healthcare sector, NovoCure's Beneish M-Score distribution charts can be found below:

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



NovoCure 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 NovoCure 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 * 0.768+0.528 * 1.0512+0.404 * 1.3062+0.892 * 0.947+0.115 * 1.3224
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.347+4.679 * -0.11666-0.327 * 1.0849
=-3.19

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was $77.1 Mil.
Revenue was 133.784 + 127.321 + 126.051 + 122.182 = $509.3 Mil.
Gross Profit was 101.228 + 95.229 + 92.033 + 92.568 = $381.1 Mil.
Total Current Assets was $1,034.4 Mil.
Total Assets was $1,146.1 Mil.
Property, Plant and Equipment(Net PPE) was $97.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.0 Mil.
Selling, General, & Admin. Expense(SGA) was $390.9 Mil.
Total Current Liabilities was $179.1 Mil.
Long-Term Debt & Capital Lease Obligation was $596.2 Mil.
Net Income was -47.079 + -49.485 + -57.418 + -53.061 = $-207.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -14.558 + -19.314 + -22.737 + -16.727 = $-73.3 Mil.
Total Receivables was $106.0 Mil.
Revenue was 128.429 + 130.998 + 140.866 + 137.547 = $537.8 Mil.
Gross Profit was 99.541 + 101.249 + 112.363 + 109.82 = $423.0 Mil.
Total Current Assets was $1,111.5 Mil.
Total Assets was $1,191.6 Mil.
Property, Plant and Equipment(Net PPE) was $69.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $10.6 Mil.
Selling, General, & Admin. Expense(SGA) was $306.4 Mil.
Total Current Liabilities was $158.8 Mil.
Long-Term Debt & Capital Lease Obligation was $584.3 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)
=(77.114 / 509.338) / (106.025 / 537.84)
=0.1514 / 0.197131
=0.768

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)
=(422.973 / 537.84) / (381.058 / 509.338)
=0.786429 / 0.748144
=1.0512

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 - (1034.409 + 97.698) / 1146.129) / (1 - (1111.529 + 68.958) / 1191.648)
=0.012234 / 0.009366
=1.3062

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
=509.338 / 537.84
=0.947

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))
=(10.623 / (10.623 + 68.958)) / (10.969 / (10.969 + 97.698))
=0.133487 / 0.100941
=1.3224

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)
=(390.866 / 509.338) / (306.411 / 537.84)
=0.7674 / 0.569707
=1.347

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)
=((596.242 + 179.115) / 1146.129) / ((584.271 + 158.777) / 1191.648)
=0.676501 / 0.623547
=1.0849

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
=(-207.043 - 0 - -73.336) / 1146.129
=-0.11666

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.

NovoCure has a M-score of -3.19 suggests that the company is unlikely to be a manipulator.


NovoCure Beneish M-Score Related Terms

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NovoCure (NAS:NVCR) Business Description

Traded in Other Exchanges
Address
Grenville Street, No. 4 The Forum, Second Floor, St. Helier, JEY, JE2 4UF
NovoCure Ltd serves in the healthcare sector of the United States. Its business involves the development, manufacture and commercialization of Tumor Treating Fields (TTFields) devices, including Optune and Optune Lua, for the treatment of solid tumor cancers. Its pipeline consists of Ovarian Cancer, Pancreatic Cancer, Non-Small Cell Lung Cancer, and Brain Metastasis. Products are comprised of two main components: electric field generator and arrays and related accessories. NovoCure derives its major revenues in the United States.
Executives
Pritesh Shah officer: Chief Commercial Officer C/O NOVOCURE INC., 20 VALLEY STREAM PARKWAY, SUITE 300, MALVERN PA 19355
Michal Nath Puri officer: Chief Human Resources Officer BUSINESS VILLAGE D4, PARK 6/PLATZ10, ROOT V8 6039
Wilhelmus Cm Groenhuysen officer: Chief Financial Officer C/O NAVTEQ CORPORATION, 222 MERCHANDISE MART STE 900, CHICAGO IL 60654
Ashley Cordova officer: Chief Financial Officer 20 VALLEY STREAM PARKWAY,, SUITE 300, MALVERN PA 19355
Arye Barak Ben officer: General Counsel TOPAZ BUILDING, 4TH FLOOR, MATAM CENTER, PO BOX 15022, SH'AR HACARMEL, HAIFA L3 31905
Timothy J Scannell director 2825 AIRVIEW BOULEVARD, KALAMAZOO MI 49002
Kristin Stafford director 1550 LIBERTY RIDGE DRIVE, SUITE 115, WAYNE PA 19087
Frank X Leonard officer: President, CNS Cancers US 20 VALLEY STREAM PARKWAY,, SUITE 300, MALVERN PA 19355
William Patrick Burke officer: Chief Human Resources Officer 195 COMMERCE WAY, PORTSMOUTH NH 03801
Uri Weinberg officer: Chief Innovation Officer NOVOCURE INC., 20 VALLEY STREAM PARKWAY, SUITE 300, MALVERN PA 19355
Allyson J Ocean director 1550 LIBERTY RIDGE DRIVE, SUITE 115, WAYNE PA 19087
Asaf Danziger director, officer: Chief Executive Officer 5 NACHUM CHAT ST., TIRAT HACARMEL L3 5112302
Ely Benaim officer: Chief Medical Officer C/O REXAHN PHARMACEUTICALS, INC., 15245 SHADY GROVE ROAD, SUITE 455, ROCKVILLE MD 20850
William F Doyle director, 10 percent owner
Jeryl L Hilleman director C/O INTERSECT ENT, INC., 1555 ADAMS DRIVE, MENLO PARK CA 94025