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Waters Corp (FRA:WAZ)
Beneish M-Score
-2.59 (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 -2.45 suggests that the company is not a manipulator.

FRA:WAZ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.02   Max: -2.19
Current: -2.59

-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 -2.56.


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 * 0.9946+0.528 * 0.9912+0.404 * 0.876+0.892 * 1.2225+0.115 * 0.9971
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9459+4.679 * -0.0243-0.327 * 1.0185
=-2.45

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was €371 Mil.
Revenue was 446.028691081 + 440.826873385 + 425.394068188 + 473.536090835 = €1,786 Mil.
Gross Profit was 261.760670053 + 254.863227301 + 250.538667652 + 284.469586375 = €1,052 Mil.
Total Current Assets was €2,757 Mil.
Total Assets was €3,672 Mil.
Property, Plant and Equipment(Net PPE) was €290 Mil.
Depreciation, Depletion and Amortization(DDA) was €80 Mil.
Selling, General & Admin. Expense(SGA) was €438 Mil.
Total Current Liabilities was €478 Mil.
Long-Term Debt was €1,296 Mil.
Net Income was 103.609551813 + 94.1432771986 + 88.7563522129 + 122.702351987 = €409 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 123.935667825 + 100.649558941 + 142.834703871 + 131.161394972 = €499 Mil.
Accounts Receivable was €305 Mil.
Revenue was 382.684100256 + 354.604401266 + 311.26310462 + 412.224247284 = €1,461 Mil.
Gross Profit was 225.764724141 + 206.041068669 + 175.539729593 + 245.28468324 = €853 Mil.
Total Current Assets was €2,095 Mil.
Total Assets was €2,911 Mil.
Property, Plant and Equipment(Net PPE) was €251 Mil.
Depreciation, Depletion and Amortization(DDA) was €68 Mil.
Selling, General & Admin. Expense(SGA) was €379 Mil.
Total Current Liabilities was €446 Mil.
Long-Term Debt was €935 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)
=(370.944488996 / 1785.78572349) / (305.089625204 / 1460.77585343)
=0.2077206 / 0.20885451
=0.9946

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)
=(254.863227301 / 1460.77585343) / (261.760670053 / 1785.78572349)
=0.58368312 / 0.58889045
=0.9912

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 - (2756.70230776 + 290.07751938) / 3672.14113873) / (1 - (2094.67680608 + 250.581205866) / 2911.20974626)
=0.17029882 / 0.19440431
=0.876

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
=1785.78572349 / 1460.77585343
=1.2225

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))
=(68.4671475172 / (68.4671475172 + 250.581205866)) / (79.5538349746 / (79.5538349746 + 290.07751938))
=0.21459803 / 0.2152248
=0.9971

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)
=(437.997187587 / 1785.78572349) / (378.772048031 / 1460.77585343)
=0.24526861 / 0.25929512
=0.9459

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)
=((1296.44480086 + 477.549674775) / 3672.14113873) / ((935.050826414 + 445.781795608) / 2911.20974626)
=0.4830954 / 0.47431575
=1.0185

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
=(409.211533212 - 0 - 498.581325609) / 3672.14113873
=-0.0243

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 -2.45 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.95881.01480.85861.1321.03960.90971.10661.03140.96311.052
GMI 1.011.01680.98510.96211.0010.99521.00911.01931.00550.9965
AQI 1.10380.88691.18760.90150.82180.88411.00670.97350.92545.0875
SGI 0.99251.04421.15170.88211.20841.13240.99860.98811.16221.1621
DEPI 1.00130.94880.90341.29050.94771.03011.08731.02150.86917.6893
SGAI 1.00590.9811.00361.02230.9640.97650.97810.99550.9418
LVGI 0.94910.83990.78990.96380.99491.02481.02290.95751.00320.8335
TATA -0.022-0.0408-0.059-0.0498-0.0327-0.02370.0038-0.0093-0.02060.1101
M-score -2.56-2.60-2.63-2.72-2.48-2.61-2.35-2.49-2.510.71

Waters Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.00231.01631.01791.06881.05491.05081.08041.01010.99461.0054
GMI 1.02031.01931.02821.02031.01091.00450.98450.9860.99120.9974
AQI 0.99790.97350.98260.98090.97560.92540.89980.89770.8765.0875
SGI 0.99351.00290.97860.99981.03291.06521.16211.21251.22251.2159
DEPI 1.04021.00921.01381.02330.91810.9320.95960.90440.99711.2726
SGAI 0.99681.00111.01771.01870.99580.98960.95150.92950.94590.9459
LVGI 0.98550.95750.93870.96060.98291.00321.03421.01861.01850.8335
TATA 0.0038-0.0097-0.02-0.0169-0.018-0.019-0.0226-0.0223-0.02430.0148
M-score -2.45-2.49-2.55-2.48-2.49-2.50-2.42-2.44-2.45-0.47
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