Switch to:
Weatherford International PLC (NYSE:WFT)
Beneish M-Score
-2.97 (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 -2.97 suggests that the company is not a manipulator.

WFT' s 10-Year Beneish M-Score Range
Min: -2.97   Max: 4.03
Current: -2.97

-2.97
4.03

During the past 13 years, the highest Beneish M-Score of Weatherford International PLC was 4.03. The lowest was -2.97. 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 * 0.921+0.528 * 0.8385+0.404 * 1.0213+0.892 * 0.9769+0.115 * 0.9555
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0111+4.679 * -0.068-0.327 * 0.9826
=-2.97

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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.
Net Income was -475 + 77 + -145 + -41 = $-584 Mil.
Non Operating Income was -225 + -9 + -19 + -9 = $-262 Mil.
Cash Flow from Operations was 584 + 350 + 435 + -406 = $963 Mil.
Accounts Receivable was $3,351 Mil.
Revenue was 3738 + 3820 + 3868 + 3837 = $15,263 Mil.
Gross Profit was 604 + 784 + 742 + 831 = $2,961 Mil.
Total Current Assets was $9,934 Mil.
Total Assets was $21,977 Mil.
Property, Plant and Equipment(Net PPE) was $7,689 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,402 Mil.
Selling, General & Admin. Expense(SGA) was $2,042 Mil.
Total Current Liabilities was $5,757 Mil.
Long-Term Debt was $7,061 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)
=(3015 / 14911) / (3351 / 15263)
=0.20219972 / 0.21955055
=0.921

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)
=(992 / 15263) / (819 / 14911)
=0.19399856 / 0.23137281
=0.8385

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 - (7944 + 7123) / 18889) / (1 - (9934 + 7689) / 21977)
=0.20233999 / 0.19811621
=1.0213

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
=14911 / 15263
=0.9769

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))
=(1402 / (1402 + 7689)) / (1371 / (1371 + 7123))
=0.15421846 / 0.16140805
=0.9555

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)
=(2017 / 14911) / (2042 / 15263)
=0.13526926 / 0.13378759
=1.0111

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)
=((6798 + 4027) / 18889) / ((7061 + 5757) / 21977)
=0.57308486 / 0.58324612
=0.9826

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
=(-584 - -262 - 963) / 18889
=-0.068

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 -2.97 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.00911.02581.01760.9840.97670.85980.99530.91250.86460.921
GMI 1.13021.1541.18741.14861.12521.13831.11061.02930.94660.8385
AQI 0.85030.83690.82360.93830.97660.82610.92820.87390.87851.0213
SGI 1.21851.17151.12661.08071.04821.00320.97160.9540.95760.9769
DEPI 1.03191.00790.95880.94760.92930.86760.94380.8890.89650.9555
SGAI 0.87420.9420.99280.99831.00841.04931.06421.08841.08361.0111
LVGI 1.11161.11481.13951.05011.03961.0421.04471.02040.99490.9826
TATA -0.0745-0.0833-0.0773-0.0503-0.0557-0.0636-0.0536-0.0632-0.066-0.068
M-score -2.63-2.70-2.73-2.63-2.68-2.94-2.76-2.97-3.05-2.97
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK