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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 -0.34. The lowest was -3.70. And the median was -2.45.
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 * 1.0077||+||0.528 * 1||+||0.404 * 0.9532||+||0.892 * 0.9698||+||0.115 * 1.0628|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0245||+||4.679 * -0.0898||-||0.327 * 0.5469|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Mar17) TTM:||Last Year (Mar16) TTM:|
|Accounts Receivable was $25.2 Mil.|
Revenue was 32.623 + 31.092 + 31.777 + 31.023 = $126.5 Mil.
Gross Profit was 32.623 + 31.092 + 31.777 + 31.023 = $126.5 Mil.
Total Current Assets was $103.0 Mil.
Total Assets was $166.1 Mil.
Property, Plant and Equipment(Net PPE) was $4.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.9 Mil.
Selling, General & Admin. Expense(SGA) was $90.4 Mil.
Total Current Liabilities was $18.1 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 6.064 + 7.577 + 5.887 + 5.661 = $25.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 9.941 + 8.395 + 8.387 + 13.385 = $40.1 Mil.
|Accounts Receivable was $25.8 Mil.
Revenue was 29.129 + 31.566 + 32.451 + 37.311 = $130.5 Mil.
Gross Profit was 29.129 + 31.566 + 32.451 + 37.311 = $130.5 Mil.
Total Current Assets was $99.2 Mil.
Total Assets was $164.5 Mil.
Property, Plant and Equipment(Net PPE) was $4.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.1 Mil.
Selling, General & Admin. Expense(SGA) was $91.0 Mil.
Total Current Liabilities was $32.7 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)|
|=||(25.208 / 126.515)||/||(25.796 / 130.457)|
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)|
|=||(130.457 / 130.457)||/||(126.515 / 126.515)|
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 - (103.006 + 4.19) / 166.104)||/||(1 - (99.239 + 4.027) / 164.452)|
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))|
|=||(3.109 / (3.109 + 4.027))||/||(2.911 / (2.911 + 4.19))|
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)|
|=||(90.381 / 126.515)||/||(90.969 / 130.457)|
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 + 18.077) / 166.104)||/||((0 + 32.722) / 164.452)|
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|
|=||(25.189 - 0||-||40.108)||/||166.104|
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 -2.79 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