Merck (WBO:MRK) Beneish M-Score : -2.99 (As of Apr. 28, 2024)

View and export this data going back to 2017. Start your Free Trial

What is Merck 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 -2.99 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WBO:MRK' s Beneish M-Score Range Over the Past 10 Years
Min: -2.99 Med: -2.73 Max: -2.24
Current: -2.99

During the past 13 years, the highest Beneish M-Score of Merck was -2.24. The lowest was -2.99. And the median was -2.73.

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.

* Premium members only.

Merck Beneish M-Score Chart

Merck Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

Get a 7-Day Free Trial

-2.71

-2.66

-2.24

-2.58

-2.99

Merck Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.54	-2.94	-2.99	-2.99	-

Competitive Comparison of Merck's Beneish M-Score

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

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:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0758

0.528 * 0.9666

0.404 * 1.0123

0.892 * 0.9889

0.115 * 1.0682

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0296

4.679 * -0.116785

0.327 * 1.1468

-3.02

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €9,490 Mil.
Revenue was 13415.71 + 14956.394 + 13877.305 + 13530.858 = €55,780 Mil.
Gross Profit was 9828.406 + 10961.026 + 10163.153 + 9863.974 = €40,817 Mil.
Total Current Assets was €29,498 Mil.
Total Assets was €97,821 Mil.
Property, Plant and Equipment(Net PPE) was €21,138 Mil.
Depreciation, Depletion and Amortization(DDA) was €3,593 Mil.
Selling, General, & Admin. Expense(SGA) was €9,741 Mil.
Total Current Liabilities was €23,561 Mil.
Long-Term Debt & Capital Lease Obligation was €30,887 Mil.
Net Income was -1124.242 + 4446.065 + -5514.925 + 2634.814 = €442 Mil.
Non Operating Income was -85.281 + -7.496 + -143.065 + -24.284 = €-260 Mil.
Cash Flow from Operations was 225.582 + 7230.829 + 3418.792 + 1250.626 = €12,126 Mil.

Total Receivables was €8,921 Mil.
Revenue was 13055.52 + 15108.59 + 13804.978 + 14438.108 = €56,407 Mil.
Gross Profit was 9391.856 + 11135.25 + 9816.642 + 9553.068 = €39,897 Mil.
Total Current Assets was €33,722 Mil.
Total Assets was €103,047 Mil.
Property, Plant and Equipment(Net PPE) was €20,222 Mil.
Depreciation, Depletion and Amortization(DDA) was €3,715 Mil.
Selling, General, & Admin. Expense(SGA) was €9,567 Mil.
Total Current Liabilities was €22,882 Mil.
Long-Term Debt & Capital Lease Obligation was €27,135 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)
	=	(9490.033 / 55780.267)	/	(8920.8 / 56407.196)
	=	0.170132	/	0.15815
	=	1.0758

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)
	=	(39896.816 / 56407.196)	/	(40816.559 / 55780.267)
	=	0.7073	/	0.731738
	=	0.9666

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 - (29498.056 + 21137.767) / 97820.975)	/	(1 - (33721.568 + 20222.368) / 103047.04)
	=	0.482362	/	0.476512
	=	1.0123

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
	=	55780.267	/	56407.196
	=	0.9889

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))
	=	(3714.946 / (3714.946 + 20222.368))	/	(3593.169 / (3593.169 + 21137.767))
	=	0.155195	/	0.14529
	=	1.0682

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)
	=	(9740.903 / 55780.267)	/	(9567.364 / 56407.196)
	=	0.17463	/	0.169612
	=	1.0296

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)
	=	((30887.311 + 23561.398) / 97820.975)	/	((27135.28 + 22881.616) / 103047.04)
	=	0.556616	/	0.485379
	=	1.1468

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
	=	(441.712 - -260.126	-	12125.829)	/	97820.975
	=	-0.116785

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 -3.02 suggests that the company is unlikely to be a manipulator.

Merck Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Merck's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.

Merck (WBO:MRK) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Merck & Co Inc (WBO:MRK) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

MRK:USA MRK:Peru MRK:Mexico 1MRKX:Italy 6MKd:UK 0QAH:UK 6MK:Germany MRK:Chile MRCK34:Brazil MRK:Argentina

Address

126 East Lincoln Avenue, Rahway, NJ, USA, 07065

Website

https://www.merck.com

Merck makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections. Within cancer, the firm's immuno-oncology platform is growing as a major contributor to overall sales. The company also has a substantial vaccine business, with treatments to prevent pediatric diseases as well as human papillomavirus, or HPV. Additionally, Merck sells animal health-related drugs. From a geographical perspective, just under half of the company's sales are generated in the United States.