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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.
During the past 13 years, the highest Beneish M-Score of Westwood Holdings Group Inc was -0.57. The lowest was -3.40. And the median was -2.44.
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 Westwood Holdings Group 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 * 0.8149||+||0.528 * 1||+||0.404 * 0.8973||+||0.892 * 1.2332||+||0.115 * 0.8329|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8974||+||4.679 * 0.0083||-||0.327 * 0.9082|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $14.5 Mil.|
Revenue was 28.265 + 28.122 + 30.905 + 25.949 = $113.2 Mil.
Gross Profit was 28.265 + 28.122 + 30.905 + 25.949 = $113.2 Mil.
Total Current Assets was $118.8 Mil.
Total Assets was $139.9 Mil.
Property, Plant and Equipment(Net PPE) was $2.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.9 Mil.
Selling, General & Admin. Expense(SGA) was $70.5 Mil.
Total Current Liabilities was $27.2 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 5.978 + 7.118 + 8.822 + 5.759 = $27.7 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 5.655 + 4.141 + 2.1 + 14.627 = $26.5 Mil.
|Accounts Receivable was $14.5 Mil.
Revenue was 25.252 + 22.998 + 23.475 + 20.1 = $91.8 Mil.
Gross Profit was 25.252 + 22.998 + 23.475 + 20.1 = $91.8 Mil.
Total Current Assets was $96.2 Mil.
Total Assets was $116.1 Mil.
Property, Plant and Equipment(Net PPE) was $2.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.8 Mil.
Selling, General & Admin. Expense(SGA) was $63.7 Mil.
Total Current Liabilities was $24.9 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)|
|=||(14.54 / 113.241)||/||(14.468 / 91.825)|
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)|
|=||(28.122 / 91.825)||/||(28.265 / 113.241)|
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 - (118.764 + 2.633) / 139.874)||/||(1 - (96.219 + 2.746) / 116.05)|
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))|
|=||(0.769 / (0.769 + 2.746))||/||(0.938 / (0.938 + 2.633))|
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)|
|=||(70.533 / 113.241)||/||(63.735 / 91.825)|
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 + 27.204) / 139.874)||/||((0 + 24.853) / 116.05)|
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|
|=||(27.677 - 0||-||26.523)||/||139.874|
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.
Westwood Holdings Group Inc has a M-score of -2.42 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
Westwood Holdings Group Inc Annual Data
Westwood Holdings Group Inc Quarterly Data