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Weatherford International PLC (NYSE:WFT)
Beneish M-Score
-3.33 (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.

Weatherford International PLC has a M-score of -3.33 suggests that the company is not a manipulator.

WFT' s 10-Year Beneish M-Score Range
Min: -3.33   Max: 4.03
Current: -3.33

-3.33
4.03

During the past 13 years, the highest Beneish M-Score of Weatherford International PLC was 4.03. The lowest was -3.33. And the median was -2.41.


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 Weatherford International PLC 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 * 0.7524+0.528 * 0.8254+0.404 * 0.9315+0.892 * 0.9392+0.115 * 0.9051
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0282+4.679 * -0.0932-0.327 * 0.9943
=-3.33

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,631 Mil.
Revenue was 2794 + 3727 + 3877 + 3711 = $14,109 Mil.
Gross Profit was 592 + 819 + 992 + 882 = $3,285 Mil.
Total Current Assets was $7,592 Mil.
Total Assets was $18,223 Mil.
Property, Plant and Equipment(Net PPE) was $6,932 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,336 Mil.
Selling, General & Admin. Expense(SGA) was $1,969 Mil.
Total Current Liabilities was $4,393 Mil.
Long-Term Debt was $6,278 Mil.
Net Income was -118 + -475 + 77 + -145 = $-661 Mil.
Non Operating Income was -37 + -225 + -9 + -19 = $-290 Mil.
Cash Flow from Operations was -42 + 584 + 350 + 435 = $1,327 Mil.
Accounts Receivable was $3,723 Mil.
Revenue was 3596 + 3738 + 3820 + 3868 = $15,022 Mil.
Gross Profit was 757 + 604 + 784 + 742 = $2,887 Mil.
Total Current Assets was $8,860 Mil.
Total Assets was $21,830 Mil.
Property, Plant and Equipment(Net PPE) was $8,213 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,407 Mil.
Selling, General & Admin. Expense(SGA) was $2,039 Mil.
Total Current Liabilities was $5,817 Mil.
Long-Term Debt was $7,039 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)
=(2631 / 14109) / (3723 / 15022)
=0.18647672 / 0.24783651
=0.7524

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)
=(819 / 15022) / (592 / 14109)
=0.1921848 / 0.23283011
=0.8254

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 - (7592 + 6932) / 18223) / (1 - (8860 + 8213) / 21830)
=0.20298524 / 0.21791113
=0.9315

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
=14109 / 15022
=0.9392

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))
=(1407 / (1407 + 8213)) / (1336 / (1336 + 6932))
=0.1462578 / 0.16158684
=0.9051

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)
=(1969 / 14109) / (2039 / 15022)
=0.13955631 / 0.13573426
=1.0282

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)
=((6278 + 4393) / 18223) / ((7039 + 5817) / 21830)
=0.58557866 / 0.58891434
=0.9943

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
=(-661 - -290 - 1327) / 18223
=-0.0932

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.

Weatherford International PLC has a M-score of -3.33 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.

Weatherford International PLC Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.22680.81591.05581.01581.11450.9070.96781.02580.85980.921
GMI 0.97390.88821.01531.01281.30421.04191.011.1541.13830.8385
AQI 1.03870.89220.93130.8741.00470.98690.95540.83690.82611.0213
SGI 1.38361.51831.19051.22580.92011.15711.27071.17151.00320.9769
DEPI 1.29690.91371.09531.1580.95590.87750.97221.00790.86760.9555
SGAI 0.89950.92670.95581.05491.27350.95430.84310.9421.05031.0101
LVGI 0.82311.16081.12251.15280.99511.04941.04421.11481.0420.9826
TATA -0.0194-0.01750.01570.0202-0.0252-0.061-0.0264-0.0833-0.0636-0.068
M-score -1.91-2.42-2.23-2.25-2.45-2.72-2.40-2.70-2.94-2.97

Weatherford International PLC Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.02581.01760.9840.97670.85980.99530.91250.86460.9210.7524
GMI 1.1541.18741.14861.12521.13831.11061.02930.94660.83850.8254
AQI 0.83690.82360.93830.97660.82610.92820.87390.87851.02130.9315
SGI 1.17151.12661.08071.04821.00320.97160.9540.95760.97690.9392
DEPI 1.00790.95880.94760.92930.86760.94380.8890.89650.95550.9051
SGAI 0.9420.99280.99831.00841.04931.06421.08841.08361.01111.0282
LVGI 1.11481.13951.05011.03961.0421.04471.02040.99490.98260.9943
TATA -0.0833-0.0773-0.0503-0.0557-0.0636-0.0536-0.0632-0.066-0.068-0.0932
M-score -2.70-2.73-2.63-2.68-2.94-2.76-2.97-3.05-2.97-3.33
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