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Waters Corp (FRA:WAZ)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

FRA:WAZ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.1   Max: 9.93
Current: -2.57

-3.1
9.93

During the past 13 years, the highest Beneish M-Score of Waters Corp was 9.93. The lowest was -3.10. And the median was -2.57.


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 * 0.991+0.528 * 1.0032+0.404 * 0.9144+0.892 * 1.0708+0.115 * 0.9521
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9807+4.679 * -0.0245-0.327 * 0.9843
=-2.57

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was €394 Mil.
Revenue was 469.419941192 + 477.536489854 + 426.765445402 + 538.520150555 = €1,912 Mil.
Gross Profit was 274.869464493 + 281.3999644 + 246.134159483 + 320.109244469 = €1,123 Mil.
Total Current Assets was €3,149 Mil.
Total Assets was €4,078 Mil.
Property, Plant and Equipment(Net PPE) was €294 Mil.
Depreciation, Depletion and Amortization(DDA) was €86 Mil.
Selling, General & Admin. Expense(SGA) was €460 Mil.
Total Current Liabilities was €463 Mil.
Long-Term Debt was €1,476 Mil.
Net Income was 111.250111378 + 114.112673549 + 84.4576149425 + 138.670705958 = €448 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 124.029225697 + 139.746351015 + 143.57579023 + 141.054805839 = €548 Mil.
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.



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)
=(393.62737236 / 1912.242027) / (370.944488996 / 1785.78572349)
=0.205846 / 0.2077206
=0.991

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)
=(1051.63215138 / 1785.78572349) / (1122.51283284 / 1912.242027)
=0.58889045 / 0.587014
=1.0032

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 - (3149.22035106 + 293.790430366) / 4078.03795777) / (1 - (2756.70230776 + 290.07751938) / 3672.14113873)
=0.1557188 / 0.17029882
=0.9144

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
=1912.242027 / 1785.78572349
=1.0708

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))
=(79.5538349746 / (79.5538349746 + 290.07751938)) / (85.8149373944 / (85.8149373944 + 293.790430366))
=0.2152248 / 0.22606355
=0.9521

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)
=(459.97770684 / 1912.242027) / (437.997187587 / 1785.78572349)
=0.24054367 / 0.24526861
=0.9807

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)
=((1476.28263388 + 462.889601711) / 4078.03795777) / ((1296.44480086 + 477.549674775) / 3672.14113873)
=0.47551598 / 0.4830954
=0.9843

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
=(448.491105828 - 0 - 548.40617278) / 4078.03795777
=-0.0245

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 -2.57 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 local exchange's 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 1.10380.88691.18760.90150.82180.88411.00670.97350.97030.8901
SGI 0.99251.04421.15170.88211.20841.13240.99860.98811.16221.1621
DEPI 1.00130.94880.90341.29050.94771.03011.08731.02150.86911.0661
SGAI 1.00590.9811.00361.02230.9640.97650.97810.99550.9418
LVGI 0.94910.83990.78990.96380.99491.02481.02290.95751.0021.0271
TATA -0.022-0.0545-0.059-0.0498-0.0327-0.02370.0038-0.0093-0.0207-0.0214
M-score -2.56-2.67-2.63-2.72-2.48-2.61-2.35-2.49-2.49-2.43

Waters Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.06881.05491.05081.08041.01010.99461.00540.9570.9990.991
GMI 1.02031.01091.00450.98450.9860.99120.99741.01061.00391.0032
AQI 0.98090.97560.97030.89980.89770.8760.89010.940.92510.9144
SGI 0.99981.03291.06521.16211.21251.22251.21591.1321.09661.0708
DEPI 1.02330.91810.9320.95960.90440.99711.02870.99051.00660.9521
SGAI 1.01870.99580.98960.95150.92950.94590.94590.98060.9960.9807
LVGI 0.96060.98291.0021.03421.01861.01851.02711.01551.01010.9843
TATA -0.0169-0.018-0.019-0.0226-0.0223-0.0243-0.0213-0.0225-0.0271-0.0245
M-score -2.48-2.49-2.48-2.42-2.44-2.45-2.42-2.53-2.55-2.57
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