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GuruFocus has detected 4 Warning Signs with John Wiley & Sons Inc $JW.A.
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John Wiley & Sons Inc (NYSE:JW.A)
Beneish M-Score
-3.09 (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.

John Wiley & Sons Inc has a M-score of -3.09 suggests that the company is not a manipulator.

JW.A' s Beneish M-Score Range Over the Past 10 Years
Min: -3.53   Max: -2.2
Current: -3.09

-3.53
-2.2

During the past 13 years, the highest Beneish M-Score of John Wiley & Sons Inc was -2.20. The lowest was -3.53. And the median was -2.82.


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 John Wiley & Sons Inc 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 * 0.9551+0.528 * 0.9892+0.404 * 0.9913+0.892 * 0.9805+0.115 * 1.1066
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0287+4.679 * -0.1168-0.327 * 1.0123
=-3.09

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $221 Mil.
Revenue was 436.456 + 425.588 + 404.285 + 434.301 = $1,701 Mil.
Gross Profit was 320.051 + 314.014 + 291.116 + 324.741 = $1,250 Mil.
Total Current Assets was $876 Mil.
Total Assets was $3,103 Mil.
Property, Plant and Equipment(Net PPE) was $241 Mil.
Depreciation, Depletion and Amortization(DDA) was $116 Mil.
Selling, General & Admin. Expense(SGA) was $991 Mil.
Total Current Liabilities was $790 Mil.
Long-Term Debt was $866 Mil.
Net Income was 47.419 + -11.451 + 31.014 + 34.207 = $101 Mil.
Non Operating Income was 2.118 + -0.36 + 0.221 + -0.916 = $1 Mil.
Cash Flow from Operations was 315.246 + 50.618 + -136.712 + 233.346 = $462 Mil.
Accounts Receivable was $236 Mil.
Revenue was 436.393 + 433.362 + 422.981 + 441.646 = $1,734 Mil.
Gross Profit was 316.178 + 316.768 + 303.252 + 324.802 = $1,261 Mil.
Total Current Assets was $897 Mil.
Total Assets was $3,114 Mil.
Property, Plant and Equipment(Net PPE) was $208 Mil.
Depreciation, Depletion and Amortization(DDA) was $116 Mil.
Selling, General & Admin. Expense(SGA) was $983 Mil.
Total Current Liabilities was $827 Mil.
Long-Term Debt was $815 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)
=(220.845 / 1700.63) / (235.806 / 1734.382)
=0.1298607 / 0.13595967
=0.9551

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)
=(1261 / 1734.382) / (1249.922 / 1700.63)
=0.72706013 / 0.73497586
=0.9892

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 - (876.471 + 241.385) / 3103.038) / (1 - (896.941 + 207.515) / 3114.408)
=0.63975433 / 0.64537209
=0.9913

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
=1700.63 / 1734.382
=0.9805

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))
=(116.273 / (116.273 + 207.515)) / (115.961 / (115.961 + 241.385))
=0.35910225 / 0.32450622
=1.1066

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)
=(991.326 / 1700.63) / (982.76 / 1734.382)
=0.58291692 / 0.56663411
=1.0287

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)
=((865.7 + 790.034) / 3103.038) / ((814.728 + 826.936) / 3114.408)
=0.53358483 / 0.52711912
=1.0123

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
=(101.189 - 1.063 - 462.498) / 3103.038
=-0.1168

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.

John Wiley & Sons Inc has a M-score of -3.09 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.

John Wiley & Sons Inc Annual Data

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
DSRI 1.0760.77720.87420.87550.99560.99630.95450.91830.95751.2019
GMI 1.01980.9671.00310.9910.99280.99350.99640.97660.98440.994
AQI 1.34760.98690.95380.98370.98360.97781.01040.96591.01031.0112
SGI 1.18271.35530.96281.05441.02561.02310.98771.00821.02660.9477
DEPI 1.08431.23840.98231.0211.00581.0380.92970.9650.95461.0535
SGAI 0.99761.02340.99490.98521.01830.98961.02451.03051.00981.0444
LVGI 1.22750.91631.06120.87340.84230.98511.08390.97291.04160.9811
TATA -0.0475-0.0504-0.0905-0.0696-0.0829-0.065-0.068-0.061-0.0599-0.0701
M-score -2.38-2.58-3.09-2.84-2.81-2.77-2.89-2.86-2.80-2.66

John Wiley & Sons Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.10271.02750.95750.9960.9311.13421.20191.11761.2020.9551
GMI 0.98060.97980.98440.98680.9850.99450.99410.99310.99540.9892
AQI 0.99111.0231.01030.94040.95350.89261.01121.02340.9450.9913
SGI 1.02891.04191.02661.0030.96390.94370.94770.94510.96410.9805
DEPI 0.99290.97390.95460.95791.011.03751.05351.03661.11881.1066
SGAI 1.01911.01551.00981.00871.01931.02921.04411.04941.05011.0287
LVGI 1.06841.05991.04161.05871.05351.12820.98110.96041.08181.0123
TATA -0.0496-0.064-0.0599-0.0535-0.0551-0.0512-0.0701-0.0706-0.1057-0.1168
M-score -2.63-2.74-2.80-2.79-2.88-2.74-2.66-2.74-2.87-3.09
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