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Weatherford International PLC (NYSE:WFT)
Beneish M-Score
-3.44 (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 -3.44 suggests that the company is not a manipulator.

WFT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.44   Max: 4.03
Current: -3.44

-3.44
4.03

During the past 13 years, the highest Beneish M-Score of Weatherford International PLC was 4.03. The lowest was -3.44. And the median was -2.42.


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 * 0.9338+0.528 * 1.5457+0.404 * 1.1845+0.892 * 0.6326+0.115 * 0.9253
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2461+4.679 * -0.1764-0.327 * 1.1694
=-3.44

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,781 Mil.
Revenue was 2012 + 2237 + 2390 + 2794 = $9,433 Mil.
Gross Profit was 78 + 368 + 374 + 592 = $1,412 Mil.
Total Current Assets was $5,564 Mil.
Total Assets was $14,787 Mil.
Property, Plant and Equipment(Net PPE) was $5,679 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,200 Mil.
Selling, General & Admin. Expense(SGA) was $1,590 Mil.
Total Current Liabilities was $4,031 Mil.
Long-Term Debt was $5,879 Mil.
Net Income was -1208 + -170 + -489 + -118 = $-1,985 Mil.
Non Operating Income was 3 + -14 + -34 + -37 = $-82 Mil.
Cash Flow from Operations was 323 + 134 + 291 + -42 = $706 Mil.
Accounts Receivable was $3,015 Mil.
Revenue was 3727 + 3877 + 3711 + 3596 = $14,911 Mil.
Gross Profit was 819 + 992 + 882 + 757 = $3,450 Mil.
Total Current Assets was $7,944 Mil.
Total Assets was $18,889 Mil.
Property, Plant and Equipment(Net PPE) was $7,123 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,371 Mil.
Selling, General & Admin. Expense(SGA) was $2,017 Mil.
Total Current Liabilities was $4,027 Mil.
Long-Term Debt was $6,798 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)
=(1781 / 9433) / (3015 / 14911)
=0.18880526 / 0.20219972
=0.9338

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)
=(368 / 14911) / (78 / 9433)
=0.23137281 / 0.14968727
=1.5457

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 - (5564 + 5679) / 14787) / (1 - (7944 + 7123) / 18889)
=0.23966998 / 0.20233999
=1.1845

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
=9433 / 14911
=0.6326

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))
=(1371 / (1371 + 7123)) / (1200 / (1200 + 5679))
=0.16140805 / 0.17444396
=0.9253

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)
=(1590 / 9433) / (2017 / 14911)
=0.16855719 / 0.13526926
=1.2461

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)
=((5879 + 4031) / 14787) / ((6798 + 4027) / 18889)
=0.67018327 / 0.57308486
=1.1694

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
=(-1985 - -82 - 706) / 14787
=-0.1764

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 -3.44 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.

Weatherford International PLC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.81591.05581.01581.11530.90640.96761.02590.85980.9210.9338
GMI 0.8891.01311.01281.30631.03771.00821.15911.13830.83851.5457
AQI 0.89220.93130.8741.00470.98690.95540.83690.82611.02131.1845
SGI 1.51831.19051.22580.91941.15791.27091.17131.00320.97690.6326
DEPI 0.91351.09551.1580.9580.8760.97241.00720.86760.95550.9253
SGAI 0.91410.93911.05491.25650.96770.84170.94321.05031.01011.2382
LVGI 1.16081.12251.15280.99511.04941.04421.11481.0420.98261.1694
TATA -0.01750.01570.0179-0.0171-0.0555-0.022-0.0833-0.0636-0.068-0.1764
M-score -2.42-2.22-2.27-2.41-2.70-2.38-2.70-2.94-2.97-3.44

Weatherford International PLC Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.97670.85980.99530.91250.86460.9210.75240.78620.82570.9338
GMI 1.12521.13831.11061.02930.94660.83850.82540.93771.12251.5457
AQI 0.97660.82610.92820.87390.87851.02130.93151.06381.10591.1845
SGI 1.04821.00320.97160.9540.95760.97690.93920.86030.74710.6326
DEPI 0.92930.86760.94380.8890.89650.95550.90510.9750.95570.9253
SGAI 1.00841.04931.06421.08841.08361.01111.02821.09091.15421.2461
LVGI 1.03961.0421.04471.02040.99490.98260.99431.00381.04311.1694
TATA -0.0557-0.0636-0.0536-0.0632-0.066-0.068-0.0932-0.1068-0.1136-0.1764
M-score -2.68-2.94-2.76-2.97-3.05-2.97-3.33-3.33-3.34-3.44
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