Royalty Pharma Plc Stock Beneish M Score

RPRX Stock  USD 26.00  0.36  1.37%   
This module uses fundamental data of Royalty Pharma to approximate the value of its Beneish M Score. Royalty Pharma M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Royalty Pharma Piotroski F Score and Royalty Pharma Altman Z Score analysis.
  
At this time, Royalty Pharma's Debt Equity Ratio is fairly stable compared to the past year. Debt Ratio is likely to rise to 0.52 in 2024, whereas Long Term Debt Total is likely to drop slightly above 6.9 B in 2024. At this time, Royalty Pharma's ROE is fairly stable compared to the past year. Return On Tangible Assets is likely to rise to 0.09 in 2024, whereas Price To Sales Ratio is likely to drop 5.07 in 2024.
At this time, it appears that Royalty Pharma Plc is an unlikely manipulator. The earnings manipulation may begin if Royalty Pharma's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Royalty Pharma executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Royalty Pharma's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.04
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

1.0

Focus
Asset Quality

0.99

Focus
Expense Coverage

1.0

Focus
Gross Margin Strengs

0.91

Focus
Accruals Factor

1.0

Focus
Depreciation Resistance

1.0

Focus
Net Sales Growth

1.05

Focus
Financial Leverage Condition

0.98

Focus

Royalty Pharma Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Royalty Pharma's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables813.8 M775.1 M
Sufficiently Up
Slightly volatile
Total Assets17.2 B16.4 B
Sufficiently Up
Slightly volatile
Total Current Assets1.6 B1.3 B
Fairly Up
Slightly volatile
Non Current Assets Total14.2 B15.1 B
Notably Down
Slightly volatile
Property Plant Equipment2.6 K2.7 K
Notably Down
Slightly volatile
Depreciation And Amortization4.8 M5.1 M
Notably Down
Slightly volatile
Selling General Administrative262.2 M249.7 M
Sufficiently Up
Slightly volatile
Total Current Liabilities132.4 M161.4 M
Significantly Down
Slightly volatile
Non Current Liabilities Total6.9 B6.1 B
Moderately Up
Pretty Stable
Net Debt5.9 B5.7 B
Sufficiently Up
Slightly volatile
Short Term Debt1.9 B1.1 B
Way Up
Slightly volatile
Long Term Debt6.8 B6.1 B
Moderately Up
Pretty Stable
Short Term Investments17.4 M18.3 M
Notably Down
Pretty Stable
Long Term Investments14.1 B15.1 B
Significantly Down
Slightly volatile
Gross Profit Margin0.690.7619
Moderately Down
Slightly volatile

Royalty Pharma Plc Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Royalty Pharma's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Royalty Pharma in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Royalty Pharma's degree of accounting gimmicks and manipulations.

About Royalty Pharma Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation And Amortization

4.85 Million

At this time, Royalty Pharma's Depreciation And Amortization is fairly stable compared to the past year.

Royalty Pharma Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Royalty Pharma. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables38.8M39.2M68.3M36.6M775.1M813.8M
Total Revenue1.8B2.1B2.3B2.2B2.4B2.5B
Total Assets12.4B21.1B17.5B16.8B16.4B17.2B
Total Current Assets832.1M2.7B2.9B2.6B1.3B1.6B
Net Debt6.0B4.8B5.6B5.4B5.7B5.9B
Long Term Debt6.0B5.8B7.1B6.1B6.1B6.8B
Operating Income2.6B1.6B1.4B977.5M1.5B1.1B
Investments(2.1B)(3.1B)(1.8B)(1.2B)(657.9M)(690.8M)
Gross Profit Margin0.440.960.991.00.760.69

Royalty Pharma ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Royalty Pharma's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Royalty Pharma's managers, analysts, and investors.
Environmental
Governance
Social

About Royalty Pharma Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Royalty Pharma Plc's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Royalty Pharma using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Royalty Pharma Plc based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.

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Additional Tools for Royalty Stock Analysis

When running Royalty Pharma's price analysis, check to measure Royalty Pharma's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Royalty Pharma is operating at the current time. Most of Royalty Pharma's value examination focuses on studying past and present price action to predict the probability of Royalty Pharma's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Royalty Pharma's price. Additionally, you may evaluate how the addition of Royalty Pharma to your portfolios can decrease your overall portfolio volatility.