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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 -2.55 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: -2.54

-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 -2.58.


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 * 0.999+0.528 * 1.0039+0.404 * 0.9251+0.892 * 1.0966+0.115 * 1.0066
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.996+4.679 * -0.0271-0.327 * 1.0101
=-2.55

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was €397 Mil.
Revenue was 477.536489854 + 426.765445402 + 538.520150555 + 446.028691081 = €1,889 Mil.
Gross Profit was 281.3999644 + 246.134159483 + 320.109244469 + 261.760670053 = €1,109 Mil.
Total Current Assets was €3,031 Mil.
Total Assets was €3,959 Mil.
Property, Plant and Equipment(Net PPE) was €294 Mil.
Depreciation, Depletion and Amortization(DDA) was €84 Mil.
Selling, General & Admin. Expense(SGA) was €461 Mil.
Total Current Liabilities was €465 Mil.
Long-Term Debt was €1,452 Mil.
Net Income was 114.112673549 + 84.4576149425 + 138.670705958 + 103.609551813 = €441 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 139.746351015 + 143.57579023 + 141.054805839 + 123.935667825 = €548 Mil.
Accounts Receivable was €362 Mil.
Revenue was 440.826873385 + 425.394068188 + 473.536090835 + 382.684100256 = €1,722 Mil.
Gross Profit was 254.863227301 + 250.538667652 + 284.469586375 + 225.764724141 = €1,016 Mil.
Total Current Assets was €2,679 Mil.
Total Assets was €3,590 Mil.
Property, Plant and Equipment(Net PPE) was €289 Mil.
Depreciation, Depletion and Amortization(DDA) was €83 Mil.
Selling, General & Admin. Expense(SGA) was €422 Mil.
Total Current Liabilities was €487 Mil.
Long-Term Debt was €1,234 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)
=(396.896582414 / 1888.85077689) / (362.276574891 / 1722.44113266)
=0.21012596 / 0.21032741
=0.999

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)
=(1015.63620547 / 1722.44113266) / (1109.4040384 / 1888.85077689)
=0.5896493 / 0.5873434
=1.0039

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 - (3031.27091492 + 293.907974368) / 3958.76913492) / (1 - (2679.28094092 + 289.491223381) / 3589.81021117)
=0.16004728 / 0.17300025
=0.9251

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
=1888.85077689 / 1722.44113266
=1.0966

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))
=(83.0016164053 / (83.0016164053 + 289.491223381)) / (83.5606381874 / (83.5606381874 + 293.907974368))
=0.22282741 / 0.22137109
=1.0066

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)
=(460.68518256 / 1888.85077689) / (421.770589561 / 1722.44113266)
=0.24389708 / 0.24486793
=0.996

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)
=((1452.20541118 + 465.115699537) / 3958.76913492) / ((1234.07288604 + 487.119308563) / 3589.81021117)
=0.48432254 / 0.47946607
=1.0101

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
=(440.850546263 - 0 - 548.312614908) / 3958.76913492
=-0.0271

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 -2.55 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 1.10380.88691.18760.90150.82180.88411.00670.97350.97030.8901
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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.01791.06881.05491.05081.08041.01010.99461.00540.9570.999
GMI 1.02821.02031.01091.00450.98450.9860.99120.99741.01061.0039
AQI 0.98260.98090.97560.97030.89980.89770.8760.89010.940.9251
SGI 0.97860.99981.03291.06521.16211.21251.22251.21591.1321.0966
DEPI 1.01381.02330.91810.9320.95960.90440.99711.02870.99051.0066
SGAI 1.01771.01870.99580.98960.95150.92950.94590.94590.98060.996
LVGI 0.93870.96060.98291.0021.03421.01861.01851.02711.01551.0101
TATA -0.02-0.0169-0.018-0.019-0.0226-0.0223-0.0243-0.0213-0.0225-0.0271
M-score -2.55-2.48-2.49-2.48-2.42-2.44-2.45-2.42-2.53-2.55
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