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Waters Corp (FRA:WAZ)
Beneish M-Score
-2.54 (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 -2.50 suggests that the company is not a manipulator.

FRA:WAZ' s 10-Year Beneish M-Score Range
Min: -3.02   Max: -2.19
Current: -2.54

-3.02
-2.19

During the past 13 years, the highest Beneish M-Score of Waters Corp was -2.19. 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 * 1.0549+0.528 * 1.0109+0.404 * 0.9756+0.892 * 1.0325+0.115 * 0.8877
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9958+4.679 * -0.018-0.327 * 0.9829
=-2.50

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was €305 Mil.
Revenue was 382.595034911 + 354.526122149 + 311.285610991 + 412.134110787 = €1,461 Mil.
Gross Profit was 225.712179984 + 205.995584989 + 175.55242227 + 245.231049563 = €852 Mil.
Total Current Assets was €2,094 Mil.
Total Assets was €2,911 Mil.
Property, Plant and Equipment(Net PPE) was €251 Mil.
Depreciation, Depletion and Amortization(DDA) was €71 Mil.
Selling, General & Admin. Expense(SGA) was €379 Mil.
Total Current Liabilities was €446 Mil.
Long-Term Debt was €935 Mil.
Net Income was 88.0504266874 + 71.0294334069 + 50.8329718004 + 103.193877551 = €313 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 99.1768813033 + 78.2428256071 + 83.6984815618 + 104.439504373 = €366 Mil.
Accounts Receivable was €280 Mil.
Revenue was 342.559550562 + 342.012888552 + 332.307335907 + 397.6875 = €1,415 Mil.
Gross Profit was 199.062921348 + 199.231235785 + 197.505791506 + 238.874237805 = €835 Mil.
Total Current Assets was €1,820 Mil.
Total Assets was €2,566 Mil.
Property, Plant and Equipment(Net PPE) was €235 Mil.
Depreciation, Depletion and Amortization(DDA) was €58 Mil.
Selling, General & Admin. Expense(SGA) was €368 Mil.
Total Current Liabilities was €369 Mil.
Long-Term Debt was €869 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)
=(305.018619085 / 1460.54087884) / (280.032958801 / 1414.56727502)
=0.20883949 / 0.19796369
=1.0549

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)
=(205.995584989 / 1414.56727502) / (225.712179984 / 1460.54087884)
=0.5900562 / 0.58368187
=1.0109

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 - (2094.18929403 + 250.522885958) / 2910.5321955) / (1 - (1819.53707865 + 234.956554307) / 2565.78202247)
=0.19440431 / 0.19927195
=0.9756

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
=1460.54087884 / 1414.56727502
=1.0325

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))
=(57.6549180918 / (57.6549180918 + 234.956554307)) / (71.4678758299 / (71.4678758299 + 250.522885958))
=0.19703574 / 0.22195629
=0.8877

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)
=(378.714328131 / 1460.54087884) / (368.338023781 / 1414.56727502)
=0.25929731 / 0.26038919
=0.9958

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)
=((934.833204034 + 445.678044996) / 2910.5321955) / ((868.913857678 + 369.216479401) / 2565.78202247)
=0.47431575 / 0.48255476
=0.9829

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
=(313.106709446 - 0 - 365.557692845) / 2910.5321955
=-0.018

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 -2.50 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 0.89211.09281.10380.88691.18760.90150.82180.88411.00670.9735
SGI 1.05811.18480.99241.04391.15240.88171.20841.13240.9990.9877
DEPI 1.0110.99691.00130.94880.90341.29050.94771.03011.08731.0215
SGAI 0.98541.02211.00590.9811.00361.02230.9640.97650.9781
LVGI 1.14261.51850.94910.83990.78990.96380.99491.02481.02290.9575
TATA -0.0272-0.0629-0.022-0.0408-0.059-0.0498-0.0327-0.02370.0038-0.0093
M-score -2.55-2.84-2.56-2.61-2.63-2.72-2.48-2.61-2.35-2.49

Waters Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02261.00541.04121.02530.96711.00231.01571.01771.06851.0549
GMI 0.99811.00571.00921.01191.01881.02031.01931.02821.02031.0109
AQI 0.9140.94941.00670.97730.99930.99790.97350.98260.98090.9756
SGI 1.09151.08541.06171.06151.01180.99391.0030.97860.99961.0325
DEPI 1.23741.13061.03361.01460.94211.04021.00871.01370.98470.8877
SGAI 0.97940.97950.98020.97410.98060.99681.00111.01771.01870.9958
LVGI 1.08630.991.02291.03540.99390.98550.95750.93870.96060.9829
TATA -0.0225-0.01480.00380.00850.00520.0038-0.0097-0.02-0.0169-0.018
M-score -2.52-2.46-2.36-2.37-2.47-2.45-2.49-2.55-2.49-2.50
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