NVO (Novo Nordisk AS) Beneish M-Score : -2.60 (As of Dec. 15, 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:

NVO' 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 * 1.0408

0.528 * 0.994

0.404 * 0.8144

0.892 * 1.2842

0.115 * 0.7794

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8973

4.679 * -0.057849

0.327 * 1.0192

-2.55

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was $11,853 Mil.
Revenue was 10614.915 + 9815.969 + 9526.371 + 9636.42 = $39,594 Mil.
Gross Profit was 8931.676 + 8334.199 + 8080.848 + 8171.271 = $33,518 Mil.
Total Current Assets was $29,050 Mil.
Total Assets was $59,161 Mil.
Property, Plant and Equipment(Net PPE) was $17,837 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,458 Mil.
Selling, General, & Admin. Expense(SGA) was $9,617 Mil.
Total Current Liabilities was $31,015 Mil.
Long-Term Debt & Capital Lease Obligation was $7,659 Mil.
Net Income was 4063.858 + 2891.716 + 3703.752 + 3213.408 = $13,873 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 6527.24 + 7283.806 + 2086.65 + 1397.407 = $17,295 Mil.

Total Receivables was $8,868 Mil.
Revenue was 8404.911 + 7901.745 + 7676.275 + 6847.883 = $30,831 Mil.
Gross Profit was 7014.898 + 6758.538 + 6499.381 + 5671.446 = $25,944 Mil.
Total Current Assets was $20,350 Mil.
Total Assets was $42,947 Mil.
Property, Plant and Equipment(Net PPE) was $11,658 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,215 Mil.
Selling, General, & Admin. Expense(SGA) was $8,346 Mil.
Total Current Liabilities was $24,694 Mil.
Long-Term Debt & Capital Lease Obligation was $2,851 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)
	=	(11853.081 / 39593.675)	/	(8867.582 / 30830.814)
	=	0.299368	/	0.287621
	=	1.0408

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)
	=	(25944.263 / 30830.814)	/	(33517.994 / 39593.675)
	=	0.841504	/	0.846549
	=	0.994

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 - (29050.313 + 17837.452) / 59160.613)	/	(1 - (20349.901 + 11657.77) / 42947.036)
	=	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
	=	39593.675	/	30830.814
	=	1.2842

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))
	=	(1215.172 / (1215.172 + 11657.77))	/	(2458.262 / (2458.262 + 17837.452))
	=	0.094397	/	0.121122
	=	0.7794

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)
	=	(9616.764 / 39593.675)	/	(8345.515 / 30830.814)
	=	0.242886	/	0.270687
	=	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)
	=	((7658.827 + 31014.885) / 59160.613)	/	((2851.296 + 24693.676) / 42947.036)
	=	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
	=	(13872.734 - 0	-	17295.103)	/	59160.613
	=	-0.057849

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 -2.55 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

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Novo Nordisk AS (NYSE:NVO) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

NONOF:USA NOVOB:Mexico NVO:Mexico 0TDD:UK NOVOBc: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.