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Westwood Holdings Group Inc (NYSE:WHG)
Beneish M-Score
-2.54 (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.

Westwood Holdings Group Inc has a M-score of -2.54 suggests that the company is not a manipulator.

WHG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.7   Max: -0.34
Current: -2.54

-3.7
-0.34

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 -2.46.


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 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 * 1.2529+0.528 * 1+0.404 * 2.101+0.892 * 1.1579+0.115 * 0.681
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0744+4.679 * -0.1736-0.327 * 1.0558
=-2.54

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $20.0 Mil.
Revenue was 32.451 + 37.311 + 29.608 + 28.265 = $127.6 Mil.
Gross Profit was 32.451 + 37.311 + 29.608 + 28.265 = $127.6 Mil.
Total Current Assets was $109.3 Mil.
Total Assets was $166.2 Mil.
Property, Plant and Equipment(Net PPE) was $2.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.8 Mil.
Selling, General & Admin. Expense(SGA) was $84.5 Mil.
Total Current Liabilities was $33.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 7.013 + 9.795 + 5.61 + 5.978 = $28.4 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 6.748 + 31.071 + 13.781 + 5.655 = $57.3 Mil.
Accounts Receivable was $13.8 Mil.
Revenue was 28.122 + 30.905 + 25.949 + 25.252 = $110.2 Mil.
Gross Profit was 28.122 + 30.905 + 25.949 + 25.252 = $110.2 Mil.
Total Current Assets was $109.5 Mil.
Total Assets was $132.6 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 $67.9 Mil.
Total Current Liabilities was $25.4 Mil.
Long-Term Debt was $0.0 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)
=(19.997 / 127.635) / (13.784 / 110.228)
=0.15667333 / 0.1250499
=1.2529

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)
=(37.311 / 110.228) / (32.451 / 127.635)
=1 / 1
=1

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 - (109.28 + 2.914) / 166.217) / (1 - (109.477 + 2.623) / 132.615)
=0.32501489 / 0.15469592
=2.101

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
=127.635 / 110.228
=1.1579

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))
=(0.917 / (0.917 + 2.623)) / (1.789 / (1.789 + 2.914))
=0.25903955 / 0.38039549
=0.681

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)
=(84.528 / 127.635) / (67.944 / 110.228)
=0.66226349 / 0.61639511
=1.0744

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 + 33.55) / 166.217) / ((0 + 25.354) / 132.615)
=0.20184458 / 0.19118501
=1.0558

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
=(28.396 - 0 - 57.255) / 166.217
=-0.1736

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 -2.54 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.

Westwood Holdings Group Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.01731.59941.49610.55340.88240.84191.02921.36890.81491.1669
GMI 1111111111
AQI 0.93960.73920.98281.30272.72360.7761.010.8320.8972.5691
SGI 1.24721.32631.28010.9161.29991.24581.12461.18491.23321.1563
DEPI 0.85060.9670.83840.70760.55152.18010.91731.26520.83290.4845
SGAI 0.91960.82768.02431.10320.95650.96111.13530.93330.90851.0775
LVGI 1.01621.26850.98040.83070.85241.19611.00741.09930.90791.2718
TATA -0.0946-0.09590.3314-0.0453-0.0963-0.0426-0.0175-0.03290.0052-0.155
M-score -2.72-2.25-1.45-3.05-2.07-2.62-2.46-2.19-2.43-2.44

Westwood Holdings Group Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.24831.36891.1981.02650.90140.81490.84041.11831.25291.1669
GMI 1111111111
AQI 0.96860.8320.78090.81650.94680.8970.94682.40052.1012.5691
SGI 1.18051.18491.2251.26421.26411.23321.19681.17321.15791.1563
DEPI 1.14171.26521.13911.06840.9330.83290.94980.83130.6810.4845
SGAI 0.99980.93330.87150.87140.86520.89990.95771.02461.07441.0878
LVGI 1.03821.09930.85410.90381.04480.90791.28971.44721.05581.2718
TATA -0.0786-0.0329-0.1008-0.03450.03180.00830.0146-0.1675-0.1736-0.155
M-score -2.47-2.19-2.57-2.39-2.21-2.42-2.50-2.60-2.54-2.44
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