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Beneish M-Score -0.74 higher than -2.22, which implies that it might have manipulated its financial results.
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.
WisdomTree Investments Inc has a M-score of -0.74 signals that the company is a manipulator.
During the past 11 years, the highest Beneish M-Score of WisdomTree Investments Inc was 4.57. The lowest was -5.06. And the median was -1.99.
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 * 0.935||+||0.528 * 1||+||0.404 * 1.1377||+||0.892 * 1.7168||+||0.115 * 8.0869|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8031||+||4.679 * 0.0286||-||0.327 * 0.6214|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $17.8 Mil.|
Revenue was 42.92 + 43.166 + 39.63 + 37.331 = $163.0 Mil.
Gross Profit was 42.92 + 43.166 + 39.63 + 37.331 = $163.0 Mil.
Total Current Assets was $124.5 Mil.
Total Assets was $159.7 Mil.
Property, Plant and Equipment(Net PPE) was $9.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.5 Mil.
Selling, General & Admin. Expense(SGA) was $96.3 Mil.
Total Current Liabilities was $19.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 30.204 + 16.476 + 14.965 + 12.242 = $73.9 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 9.434 + 22.409 + 18.506 + 18.965 = $69.3 Mil.
|Accounts Receivable was $11.1 Mil.
Revenue was 29.341 + 23.574 + 21.661 + 20.393 = $95.0 Mil.
Gross Profit was 29.341 + 23.574 + 21.661 + 20.393 = $95.0 Mil.
Total Current Assets was $64.9 Mil.
Total Assets was $76.1 Mil.
Property, Plant and Equipment(Net PPE) was $0.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.3 Mil.
Selling, General & Admin. Expense(SGA) was $69.8 Mil.
Total Current Liabilities was $14.9 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)|
|=||(17.815 / 163.047)||/||(11.098 / 94.969)|
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)|
|=||(43.166 / 94.969)||/||(42.92 / 163.047)|
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 - (124.522 + 9.587) / 159.725)||/||(1 - (64.924 + 0.408) / 76.053)|
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))|
|=||(0.318 / (0.318 + 0.408))||/||(0.549 / (0.549 + 9.587))|
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)|
|=||(96.265 / 163.047)||/||(69.82 / 94.969)|
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 + 19.478) / 159.725)||/||((0 + 14.926) / 76.053)|
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|
|=||(73.887 - 0||-||69.314)||/||159.725|
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 -0.74 signals that the company is likely to 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