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Waters Corp (FRA:WAZ)
Beneish M-Score
-2.46 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Waters Corp has a M-score of -2.49 suggests that the company is not a manipulator.

FRA:WAZ' s 10-Year Beneish M-Score Range
Min: -3.02   Max: -2.2
Current: -2.46

-3.02
-2.2

During the past 13 years, the highest Beneish M-Score of Waters Corp was -2.20. The lowest was -3.02. And the median was -2.55.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Waters Corp 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 * 1.0614+0.528 * 1.0202+0.404 * 0.9809+0.892 * 1.0031+0.115 * 0.9799
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0244+4.679 * -0.0168-0.327 * 0.9606
=-2.49

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was €297 Mil.
Revenue was 356.098300074 + 311.736422882 + 415.160058737 + 335.276392962 = €1,418 Mil.
Gross Profit was 206.909090909 + 175.806661839 + 247.031571219 + 194.830645161 = €825 Mil.
Total Current Assets was €1,981 Mil.
Total Assets was €2,755 Mil.
Property, Plant and Equipment(Net PPE) was €243 Mil.
Depreciation, Depletion and Amortization(DDA) was €64 Mil.
Selling, General & Admin. Expense(SGA) was €374 Mil.
Total Current Liabilities was €439 Mil.
Long-Term Debt was €857 Mil.
Net Income was 71.3444198078 + 50.906589428 + 103.95154185 + 71.8826979472 = €298 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 78.5898004435 + 83.8196958726 + 105.206314244 + 76.8071847507 = €344 Mil.
Accounts Receivable was €279 Mil.
Revenue was 344.625668449 + 330.013803681 + 392.305263158 + 346.917501928 = €1,414 Mil.
Gross Profit was 200.753246753 + 196.142638037 + 235.641353383 + 206.052428682 = €839 Mil.
Total Current Assets was €1,791 Mil.
Total Assets was €2,510 Mil.
Property, Plant and Equipment(Net PPE) was €226 Mil.
Depreciation, Depletion and Amortization(DDA) was €58 Mil.
Selling, General & Admin. Expense(SGA) was €364 Mil.
Total Current Liabilities was €363 Mil.
Long-Term Debt was €867 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(297.057649667 / 1418.27117465) / (279.008403361 / 1413.86223722)
=0.20945053 / 0.19733776
=1.0614

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)
=(175.806661839 / 1413.86223722) / (206.909090909 / 1418.27117465)
=0.59311979 / 0.58139655
=1.0202

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1981.23133777 + 242.866223208) / 2755.01108647) / (1 - (1790.89228419 + 225.9289534) / 2509.95339954)
=0.19270831 / 0.19647064
=0.9809

4. SGI = Sales Growth Index

Ratio of sales 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
=1418.27117465 / 1413.86223722
=1.0031

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(57.9792442756 / (57.9792442756 + 225.9289534)) / (63.9379109133 / (63.9379109133 + 242.866223208))
=0.20421828 / 0.20839977
=0.9799

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(373.543716375 / 1418.27117465) / (363.507784 / 1413.86223722)
=0.26337962 / 0.25710269
=1.0244

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((857.354028086 + 439.460458241) / 2755.01108647) / ((867.074102368 + 362.836516425) / 2509.95339954)
=0.47071117 / 0.49001333
=0.9606

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
=(298.085249033 - 0 - 344.422995311) / 2755.01108647
=-0.0168

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Waters Corp has a M-score of -2.49 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Waters Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.10020.90130.95881.01480.85861.1321.03960.90971.10661.0314
GMI 0.99421.00211.011.01680.98510.96211.0010.99521.00911.0193
AQI 0.88351.09281.10380.88691.18760.90150.82180.88411.00670.9735
SGI 1.11051.13331.0331.01471.18870.88351.17031.16750.9661.0086
DEPI 1.0110.99691.00130.94880.90341.29050.94771.03011.08731.0215
SGAI 0.98541.02211.00590.9810.98851.03790.9640.97650.9781
LVGI 1.14261.51850.94910.83990.78990.96380.99491.02481.02290.9575
TATA -0.0272-0.0629-0.022-0.0408-0.055-0.0498-0.0327-0.02370.0038-0.0093
M-score -2.51-2.88-2.53-2.63-2.57-2.72-2.51-2.57-2.38-2.47

Waters Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.01711.0010.98041.00761.02510.9711.0061.0411.02551.0614
GMI 0.99540.99831.00561.00921.01181.0191.02041.01931.02821.0202
AQI 0.90940.9140.94941.00670.97730.99930.99790.97350.98260.9809
SGI 1.0931.12921.10471.06091.05030.99440.97510.99930.97931.0031
DEPI 1.13861.2181.10971.00651.01440.94431.04191.02891.01990.9799
SGAI 0.99170.98570.98560.9820.97550.96880.98470.99961.01651.0244
LVGI 1.0411.08630.991.02291.03540.99390.98550.95750.93870.9606
TATA -0.0204-0.0222-0.01510.00360.00830.0050.0037-0.0096-0.02-0.0168
M-score -2.51-2.50-2.47-2.40-2.38-2.48-2.46-2.47-2.54-2.49
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