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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.
During the past 12 years, the highest Beneish M-Score of WisdomTree Investments Inc was 517.58. The lowest was -3.34. And the median was -1.97.
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 WisdomTree Investments 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 * 1.2974||+||0.528 * 1||+||0.404 * 0.7826||+||0.892 * 1.4037||+||0.115 * 0.8285|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9865||+||4.679 * -0.2226||-||0.327 * 1.3941|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $28.7 Mil.|
Revenue was 81.559 + 60.141 + 49.6 + 47.114 = $238.4 Mil.
Gross Profit was 81.559 + 60.141 + 49.6 + 47.114 = $238.4 Mil.
Total Current Assets was $228.0 Mil.
Total Assets was $265.2 Mil.
Property, Plant and Equipment(Net PPE) was $10.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.9 Mil.
Selling, General & Admin. Expense(SGA) was $131.9 Mil.
Total Current Liabilities was $40.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 24.172 + 12.062 + 9.622 + 10.623 = $56.5 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 48.595 + 16.937 + 25.98 + 23.99 = $115.5 Mil.
|Accounts Receivable was $15.7 Mil.
Revenue was 44.128 + 42.92 + 43.166 + 39.63 = $169.8 Mil.
Gross Profit was 44.128 + 42.92 + 43.166 + 39.63 = $169.8 Mil.
Total Current Assets was $147.3 Mil.
Total Assets was $180.3 Mil.
Property, Plant and Equipment(Net PPE) was $9.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.7 Mil.
Selling, General & Admin. Expense(SGA) was $95.3 Mil.
Total Current Liabilities was $19.7 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(28.652 / 238.414)||/||(15.733 / 169.844)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(60.141 / 169.844)||/||(81.559 / 238.414)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (228.027 + 10.274) / 265.206)||/||(1 - (147.286 + 9.634) / 180.291)|
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.
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))|
|=||(0.667 / (0.667 + 9.634))||/||(0.871 / (0.871 + 10.274))|
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)|
|=||(131.911 / 238.414)||/||(95.263 / 169.844)|
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)|
|=||((0 + 40.356) / 265.206)||/||((0 + 19.679) / 180.291)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(56.479 - 0||-||115.502)||/||265.206|
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.
WisdomTree Investments Inc has a M-score of -3.12 suggests that the company will not be a manipulator.
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
WisdomTree Investments Inc Annual Data
WisdomTree Investments Inc Quarterly Data