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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.
WSP Holdings Ltd has a M-score of -3.04 suggests that the company is not a manipulator.
During the past 9 years, the highest Beneish M-Score of WSP Holdings Ltd was 0.00. The lowest was 0.00. And the median was 0.00.
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 WSP Holdings Ltd 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 * 1.2619||+||0.528 * 0.683||+||0.404 * 1.1002||+||0.892 * 0.8054||+||0.115 * 0.7357|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.5519||+||4.679 * -0.076||-||0.327 * 1.0715|
|This Year (Mar13) TTM:||Last Year (Mar12) TTM:|
|Accounts Receivable was $187.8 Mil.|
Revenue was 119.34 + 131.351 + 141.278 + 159.215 = $551.2 Mil.
Gross Profit was 24.532 + 6.382 + 7.808 + 7.619 = $46.3 Mil.
Total Current Assets was $693.3 Mil.
Total Assets was $1,336.2 Mil.
Property, Plant and Equipment(Net PPE) was $587.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $48.4 Mil.
Selling, General & Admin. Expense(SGA) was $118.8 Mil.
Total Current Liabilities was $1,200.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -25.826 + -29.139 + -22.747 + -15.689 = $-93.4 Mil.
Non Operating Income was 2.506 + 0.278 + 2.209 + -0.126 = $4.9 Mil.
Cash Flow from Operations was 0 + 3.252 + 0 + 0 = $3.3 Mil.
|Accounts Receivable was $184.8 Mil.
Revenue was 129.453 + 180.421 + 188.971 + 185.543 = $684.4 Mil.
Gross Profit was 2.665 + 12.965 + 16.945 + 6.726 = $39.3 Mil.
Total Current Assets was $772.4 Mil.
Total Assets was $1,484.5 Mil.
Property, Plant and Equipment(Net PPE) was $656.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $38.9 Mil.
Selling, General & Admin. Expense(SGA) was $95.0 Mil.
Total Current Liabilities was $1,184.0 Mil.
Long-Term Debt was $60.4 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)|
|=||(187.777 / 551.184)||/||(184.773 / 684.388)|
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)|
|=||(6.382 / 684.388)||/||(24.532 / 551.184)|
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 - (693.252 + 587.504) / 1336.168)||/||(1 - (772.401 + 656.149) / 1484.508)|
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))|
|=||(38.94 / (38.94 + 656.149))||/||(48.422 / (48.422 + 587.504))|
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)|
|=||(118.776 / 551.184)||/||(95.031 / 684.388)|
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 + 1200.15) / 1336.168)||/||((60.372 + 1183.988) / 1484.508)|
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|
|=||(-93.401 - 4.867||-||3.252)||/||1336.168|
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.
WSP Holdings Ltd has a M-score of -3.04 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
WSP Holdings Ltd Annual Data
WSP Holdings Ltd Quarterly Data