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Waters Corporation (FRA:WAZ)
Beneish M-Score
-2.45 (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 Corporation has a M-score of -2.47 suggests that the company is not a manipulator.

FRA:WAZ' s 10-Year Beneish M-Score Range
Min: -2.96   Max: -2.32
Current: -2.45

-2.96
-2.32

During the past 13 years, the highest Beneish M-Score of Waters Corporation was -2.32. The lowest was -2.96. And the median was -2.49.


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 Corporation 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 * 1.041+0.528 * 1.0193+0.404 * 0.9735+0.892 * 0.9993+0.115 * 1.0289
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0001+4.679 * -0.0096-0.327 * 0.9575
=-2.47

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was €316 Mil.
Revenue was 415.160058737 + 335.276392962 + 344.625668449 + 330.013803681 = €1,425 Mil.
Gross Profit was 247.031571219 + 194.830645161 + 200.753246753 + 196.142638037 = €839 Mil.
Total Current Assets was €1,877 Mil.
Total Assets was €2,630 Mil.
Property, Plant and Equipment(Net PPE) was €239 Mil.
Depreciation, Depletion and Amortization(DDA) was €60 Mil.
Selling, General & Admin. Expense(SGA) was €369 Mil.
Total Current Liabilities was €358 Mil.
Long-Term Debt was €874 Mil.
Net Income was 103.95154185 + 71.8826979472 + 68.230710466 + 92.8366564417 = €337 Mil.
Non Operating Income was 0 + 0 + -1.20320855615 + 0 = €-1 Mil.
Cash Flow from Operations was 105.206314244 + 76.8071847507 + 83.2864782277 + 98.004601227 = €363 Mil.
Accounts Receivable was €304 Mil.
Revenue was 392.305263158 + 346.917501928 + 367.343368592 + 319.496960486 = €1,426 Mil.
Gross Profit was 235.641353383 + 206.052428682 + 221.485760781 + 192.376899696 = €856 Mil.
Total Current Assets was €1,698 Mil.
Total Assets was €2,382 Mil.
Property, Plant and Equipment(Net PPE) was €205 Mil.
Depreciation, Depletion and Amortization(DDA) was €53 Mil.
Selling, General & Admin. Expense(SGA) was €370 Mil.
Total Current Liabilities was €379 Mil.
Long-Term Debt was €786 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)
=(316.435389134 / 1425.07592383) / (304.177443609 / 1426.06309416)
=0.22204809 / 0.21329873
=1.041

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)
=(194.830645161 / 1426.06309416) / (247.031571219 / 1425.07592383)
=0.59994291 / 0.58857082
=1.0193

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 - (1876.83920705 + 238.569750367) / 2630.41776799) / (1 - (1697.53834586 + 205.472932331) / 2382.06766917)
=0.19578974 / 0.20110948
=0.9735

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
=1425.07592383 / 1426.06309416
=0.9993

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))
=(53.254410545 / (53.254410545 + 205.472932331)) / (59.6648164273 / (59.6648164273 + 238.569750367))
=0.20583217 / 0.20006003
=1.0289

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)
=(369.345588338 / 1425.07592383) / (369.573088136 / 1426.06309416)
=0.25917608 / 0.2591562
=1.0001

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)
=((873.715124816 + 357.953010279) / 2630.41776799) / ((785.714285714 + 379.129323308) / 2382.06766917)
=0.4682405 / 0.48900526
=0.9575

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
=(336.901606705 - -1.20320855615 - 363.304578449) / 2630.41776799
=-0.0096

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 Corporation has a M-score of -2.47 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 Corporation 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 1.11051.13331.0331.01471.18870.88351.17031.16750.9661.0086
DEPI 1.0110.99691.00130.94880.90341.29050.94771.03011.08731.0215
SGAI 0.98541.02211.00590.9811.00361.02230.9640.97650.9781
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 -2.51-2.88-2.53-2.63-2.59-2.71-2.51-2.57-2.38-2.47

Waters Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.95410.97141.01711.0010.98041.00761.02510.9711.0061.041
GMI 0.99240.99520.99540.99831.00561.00921.01181.0191.02041.0193
AQI 0.83960.88410.90940.9140.94941.00670.97730.99930.99790.9735
SGI 1.11411.09331.0931.12921.10471.06091.05030.99440.97510.9993
DEPI 0.96981.08811.13861.2181.10971.00651.01440.94431.04191.0289
SGAI 0.97340.97430.99170.97940.97930.98150.9750.98120.99721.0001
LVGI 0.97631.02481.0411.08630.991.02291.03540.99390.98550.9575
TATA -0.0219-0.0221-0.0204-0.0222-0.01510.00360.00830.0050.0037-0.0096
M-score -2.58-2.57-2.51-2.50-2.47-2.40-2.38-2.48-2.46-2.47
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