Big Pharma Split (TSX:PRM.PR.A.PFD) Beneish M-Score : -7.47 (As of Apr. 26, 2024)

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What is Big Pharma Split Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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 -7.47 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

TSX:PRM.PR.A.PFD' s Beneish M-Score Range Over the Past 10 Years
Min: -7.47 Med: 3.84 Max: 171.83
Current: -7.47

During the past 7 years, the highest Beneish M-Score of Big Pharma Split was 171.83. The lowest was -7.47. And the median was 3.84.

Big Pharma Split 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 Big Pharma Split 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 * 0.0654

0.528 * 1

0.404 * 1.5936

0.892 * 0.0841

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 11.1301

4.679 * -0.452158

0.327 * 0.0598

-7.47

* 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 C$0.08 Mil.
Revenue was C$0.31 Mil.
Gross Profit was C$0.31 Mil.
Total Current Assets was C$0.28 Mil.
Total Assets was C$26.54 Mil.
Property, Plant and Equipment(Net PPE) was C$0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was C$0.00 Mil.
Selling, General, & Admin. Expense(SGA) was C$0.34 Mil.
Total Current Liabilities was C$0.39 Mil.
Long-Term Debt & Capital Lease Obligation was C$0.00 Mil.
Net Income was C$-0.14 Mil.
Gross Profit was C$0.00 Mil.
Cash Flow from Operations was C$11.86 Mil.

Total Receivables was C$14.00 Mil.
Revenue was C$3.71 Mil.
Gross Profit was C$3.71 Mil.
Total Current Assets was C$14.82 Mil.
Total Assets was C$39.10 Mil.
Property, Plant and Equipment(Net PPE) was C$0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was C$0.00 Mil.
Selling, General, & Admin. Expense(SGA) was C$0.36 Mil.
Total Current Liabilities was C$9.51 Mil.
Long-Term Debt & Capital Lease Obligation was C$0.00 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)
	=	(0.077 / 0.312)	/	(14.004 / 3.711)
	=	0.246795	/	3.773646
	=	0.0654

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)
	=	(3.711 / 3.711)	/	(0.312 / 0.312)
	=	1	/	1
	=	1

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 - (0.281 + 0) / 26.535)	/	(1 - (14.823 + 0) / 39.096)
	=	0.98941	/	0.620856
	=	1.5936

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
	=	0.312	/	3.711
	=	0.0841

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))
	=	(0 / (0 + 0))	/	(0 / (0 + 0))
	=		/
	=	1

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)
	=	(0.335 / 0.312)	/	(0.358 / 3.711)
	=	1.073718	/	0.09647
	=	11.1301

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)
	=	((0 + 0.386) / 26.535)	/	((0 + 9.511) / 39.096)
	=	0.014547	/	0.243273
	=	0.0598

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
	=	(-0.14 - 0	-	11.858)	/	26.535
	=	-0.452158

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.

Big Pharma Split has a M-score of -7.47 suggests that the company is unlikely to be a manipulator.

Big Pharma Split Beneish M-Score Related Terms

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Big Pharma Split (TSX:PRM.PR.A.PFD) Business Description

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PRM:Canada

Address

610 Chartwell Road, Suite 204, Oakville, ON, CAN, L6J 4A5

Website

https://www.harvestportfolios.com

Big Pharma Split Corp is a mutual fund corporation. Its investment objective is to provide shareholders with fixed cumulative preferential quarterly cash distributions, and regular monthly cash distributions. The company has a presence in the United States; Switzerland; France and United Kingdom.