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Waters Corp (FRA:WAZ)
Beneish M-Score
-2.61 (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: -2.96   Max: -2.32
Current: -2.61

-2.96
-2.32

During the past 13 years, the highest Beneish M-Score of Waters Corp was -2.32. The lowest was -2.96. And the median was -2.51.


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 * 1.0512+0.528 * 1.0045+0.404 * 0.9254+0.892 * 1.065+0.115 * 0.9354
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9895+4.679 * -0.019-0.327 * 1.0032
=-2.50

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was €352 Mil.
Revenue was 473.536090835 + 382.595034911 + 354.526122149 + 311.285610991 = €1,522 Mil.
Gross Profit was 284.469586375 + 225.712179984 + 205.995584989 + 175.55242227 = €892 Mil.
Total Current Assets was €2,314 Mil.
Total Assets was €3,145 Mil.
Property, Plant and Equipment(Net PPE) was €261 Mil.
Depreciation, Depletion and Amortization(DDA) was €72 Mil.
Selling, General & Admin. Expense(SGA) was €390 Mil.
Total Current Liabilities was €472 Mil.
Long-Term Debt was €1,006 Mil.
Net Income was 122.702351987 + 88.0504266874 + 71.0294334069 + 50.8329718004 = €333 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 131.161394972 + 99.1768813033 + 78.2428256071 + 83.6984815618 = €392 Mil.
Accounts Receivable was €314 Mil.
Revenue was 412.134110787 + 342.559550562 + 342.012888552 + 332.307335907 = €1,429 Mil.
Gross Profit was 245.231049563 + 199.062921348 + 199.231235785 + 197.505791506 = €841 Mil.
Total Current Assets was €1,863 Mil.
Total Assets was €2,611 Mil.
Property, Plant and Equipment(Net PPE) was €237 Mil.
Depreciation, Depletion and Amortization(DDA) was €60 Mil.
Selling, General & Admin. Expense(SGA) was €370 Mil.
Total Current Liabilities was €355 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)
=(351.675587997 / 1521.94285889) / (314.129008746 / 1429.01388581)
=0.23107017 / 0.21982222
=1.0512

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)
=(225.712179984 / 1429.01388581) / (284.469586375 / 1521.94285889)
=0.58853942 / 0.58591541
=1.0045

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 - (2314.46553122 + 260.813463098) / 3145.12084347) / (1 - (1863.15962099 + 236.83090379) / 2611.24562682)
=0.18118282 / 0.19578974
=0.9254

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
=1521.94285889 / 1429.01388581
=1.065

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))
=(59.8625329321 / (59.8625329321 + 236.83090379)) / (71.7275094713 / (71.7275094713 + 260.813463098))
=0.20176561 / 0.21569525
=0.9354

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)
=(390.45434927 / 1521.94285889) / (370.485989631 / 1429.01388581)
=0.25654994 / 0.25925989
=0.9895

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)
=((1005.67721006 + 471.690997567) / 3145.12084347) / ((867.346938776 + 355.344023324) / 2611.24562682)
=0.46973337 / 0.4682405
=1.0032

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
=(332.615183882 - 0 - 392.279583444) / 3145.12084347
=-0.019

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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.90130.95881.01480.85861.1321.03960.90971.10661.03140.9631
GMI 1.00211.011.01680.98510.96211.0010.99521.00911.01931.0055
AQI 1.09281.10380.88691.18760.90150.82180.88411.00670.97350.9254
SGI 1.18480.99241.04391.15240.88171.20841.13240.9990.98771.1625
DEPI 0.99691.00130.94880.90341.29050.94771.03011.08731.02150.8691
SGAI 1.02211.00590.9811.00361.02230.9640.97650.97810.9955
LVGI 1.51850.94910.83990.78990.96380.99491.02481.02290.95751.0032
TATA -0.0629-0.022-0.0408-0.059-0.0498-0.0327-0.02370.0038-0.0093-0.0206
M-score -2.84-2.56-2.61-2.63-2.72-2.48-2.61-2.35-2.49-2.51

Waters Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.00541.04121.02530.96711.00231.01571.01771.06851.05491.0512
GMI 1.00571.00921.01191.01881.02031.01931.02821.02031.01091.0045
AQI 0.94941.00670.97730.99930.99790.97350.98260.98090.97560.9254
SGI 1.08541.06171.06151.01180.99391.0030.97860.99961.03251.065
DEPI 1.13061.03361.01460.94211.04021.00871.01370.98470.88770.9354
SGAI 0.97950.98020.97410.98060.99681.00111.01771.01870.99580.9895
LVGI 0.991.02291.03540.99390.98550.95750.93870.96060.98291.0032
TATA -0.01480.00380.00850.00520.0038-0.0097-0.02-0.0169-0.018-0.019
M-score -2.46-2.36-2.37-2.47-2.45-2.49-2.55-2.49-2.50-2.50
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