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Waters Corp (FRA:WAZ)
Beneish M-Score
-2.63 (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 -2.44 suggests that the company is not a manipulator.

FRA:WAZ' s 10-Year Beneish M-Score Range
Min: -3.02   Max: -2.19
Current: -2.63

-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 * 1.0101+0.528 * 0.986+0.404 * 0.8977+0.892 * 1.2125+0.115 * 0.9056
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9295+4.679 * -0.0223-0.327 * 1.0186
=-2.44

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 94.1432771986 + 88.7563522129 + 122.702351987 + 88.0709241872 = €394 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 100.649558941 + 142.834703871 + 131.161394972 + 99.199968961 = €474 Mil.
Accounts Receivable was €296 Mil.
Revenue was 354.604401266 + 311.26310462 + 412.224247284 + 342.533892592 = €1,421 Mil.
Gross Profit was 206.041068669 + 175.539729593 + 245.28468324 + 199.048011385 = €826 Mil.
Total Current Assets was €1,973 Mil.
Total Assets was €2,743 Mil.
Property, Plant and Equipment(Net PPE) was €242 Mil.
Depreciation, Depletion and Amortization(DDA) was €61 Mil.
Selling, General & Admin. Expense(SGA) was €374 Mil.
Total Current Liabilities was €438 Mil.
Long-Term Debt was €854 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)
=(362.276574891 / 1722.44113266) / (295.811437403 / 1420.62564576)
=0.21032741 / 0.20822617
=1.0101

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)
=(250.538667652 / 1420.62564576) / (254.863227301 / 1722.44113266)
=0.58137307 / 0.5896493
=0.986

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 - (2679.28094092 + 289.491223381) / 3589.81021117) / (1 - (1972.91970266 + 241.847354088) / 2743.45330095)
=0.17300025 / 0.19270831
=0.8977

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
=1722.44113266 / 1420.62564576
=1.2125

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))
=(61.0411185529 / (61.0411185529 + 241.847354088)) / (82.8581394888 / (82.8581394888 + 289.491223381))
=0.20153002 / 0.22252795
=0.9056

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)
=(421.770589561 / 1722.44113266) / (374.230230233 / 1420.62564576)
=0.24486793 / 0.26342635
=0.9295

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)
=((1234.07288604 + 487.119308563) / 3589.81021117) / ((853.757267977 + 437.616839626) / 2743.45330095)
=0.47946607 / 0.47071117
=1.0186

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
=(393.672905586 - 0 - 473.845626745) / 3589.81021117
=-0.0223

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 -2.44 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 1.1850.99251.04421.15170.88211.20841.13240.99860.98811.1622
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 -2.84-2.56-2.60-2.63-2.72-2.48-2.61-2.35-2.49-2.51

Waters Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.02520.9671.00231.01631.01791.06881.05491.05081.08041.0101
GMI 1.01191.01881.02031.01931.02821.02031.01091.00450.98450.986
AQI 0.97730.99930.99790.97350.98260.98090.97560.92540.89980.8977
SGI 1.06131.01140.99351.00290.97860.99981.03291.06521.16211.2125
DEPI 1.01450.94191.04021.00921.01381.02330.88610.93340.9610.9056
SGAI 0.97440.96820.98431.00081.01741.0251.0020.98960.95150.9295
LVGI 1.03540.99390.98550.95750.93870.96060.98291.00321.03421.0186
TATA 0.00850.00520.0038-0.0097-0.02-0.0169-0.018-0.019-0.0226-0.0223
M-score -2.37-2.47-2.44-2.49-2.55-2.48-2.50-2.50-2.42-2.44
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