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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.
Westwood Holdings Group, Inc. has a M-score of -2.19 signals that the company is a 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 -2.45.
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 * 1.3689||+||0.528 * 1||+||0.404 * 0.832||+||0.892 * 1.1849||+||0.115 * 1.2652|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9333||+||4.679 * -0.0329||-||0.327 * 1.0993|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $14.47 Mil.|
Revenue was 25.252 + 22.998 + 23.475 + 20.1 = $91.83 Mil.
Gross Profit was 25.252 + 22.998 + 23.475 + 20.1 = $91.83 Mil.
Total Current Assets was $96.19 Mil.
Total Assets was $116.02 Mil.
Property, Plant and Equipment(Net PPE) was $2.75 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.77 Mil.
Selling, General & Admin. Expense(SGA) was $63.56 Mil.
Total Current Liabilities was $24.85 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was 5.86 + 4.319 + 4.879 + 2.833 = $17.89 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 2.472 + 9.534 + 4.409 + 5.292 = $21.71 Mil.
|Accounts Receivable was $8.92 Mil.
Revenue was 20.624 + 18.941 + 20.066 + 17.864 = $77.50 Mil.
Gross Profit was 20.624 + 18.941 + 20.066 + 17.864 = $77.50 Mil.
Total Current Assets was $77.37 Mil.
Total Assets was $96.62 Mil.
Property, Plant and Equipment(Net PPE) was $2.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.82 Mil.
Selling, General & Admin. Expense(SGA) was $57.47 Mil.
Total Current Liabilities was $18.83 Mil.
Long-Term Debt was $0.00 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)|
|=||(14.468 / 91.825)||/||(8.92 / 77.495)|
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)|
|=||(22.998 / 77.495)||/||(25.252 / 91.825)|
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 - (96.189 + 2.746) / 116.02)||/||(1 - (77.37 + 2.145) / 96.615)|
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))|
|=||(0.821 / (0.821 + 2.145))||/||(0.769 / (0.769 + 2.746))|
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)|
|=||(63.556 / 91.825)||/||(57.469 / 77.495)|
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 + 24.853) / 116.02)||/||((0 + 18.826) / 96.615)|
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|
|=||(17.891 - 0||-||21.707)||/||116.02|
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 -2.19 signals that the company is likely to 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