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Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-1.77 (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.

Williams Companies Inc has a M-score of -1.77 signals that the company is a manipulator.

WMB' s 10-Year Beneish M-Score Range
Min: -3.57   Max: 50.34
Current: -1.77

-3.57
50.34

During the past 13 years, the highest Beneish M-Score of Williams Companies Inc was 50.34. The lowest was -3.57. And the median was -2.48.


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 Williams Companies 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 * 1.6107+0.528 * 1.2507+0.404 * 1.5119+0.892 * 1.0123+0.115 * 1.2616
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0664+4.679 * -0.0483-0.327 * 0.9754
=-1.77

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $962 Mil.
Revenue was 2069 + 1678 + 1749 + 1660 = $7,156 Mil.
Gross Profit was 1262 + 954 + 682 + -163 = $2,735 Mil.
Total Current Assets was $1,898 Mil.
Total Assets was $49,807 Mil.
Property, Plant and Equipment(Net PPE) was $27,398 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,006 Mil.
Selling, General & Admin. Expense(SGA) was $584 Mil.
Total Current Liabilities was $2,931 Mil.
Long-Term Debt was $19,922 Mil.
Net Income was 1678 + 103 + 140 + -14 = $1,907 Mil.
Non Operating Income was 2609 + 59 + -33 + 59 = $2,694 Mil.
Cash Flow from Operations was 345 + 313 + 446 + 515 = $1,619 Mil.
Accounts Receivable was $590 Mil.
Revenue was 1623 + 1767 + 1810 + 1869 = $7,069 Mil.
Gross Profit was 913 + 966 + 760 + 740 = $3,379 Mil.
Total Current Assets was $1,782 Mil.
Total Assets was $26,455 Mil.
Property, Plant and Equipment(Net PPE) was $17,467 Mil.
Depreciation, Depletion and Amortization(DDA) was $817 Mil.
Selling, General & Admin. Expense(SGA) was $541 Mil.
Total Current Liabilities was $2,086 Mil.
Long-Term Debt was $10,359 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)
=(962 / 7156) / (590 / 7069)
=0.13443264 / 0.08346301
=1.6107

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)
=(954 / 7069) / (1262 / 7156)
=0.47800255 / 0.38219676
=1.2507

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 - (1898 + 27398) / 49807) / (1 - (1782 + 17467) / 26455)
=0.41180958 / 0.27238707
=1.5119

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
=7156 / 7069
=1.0123

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))
=(817 / (817 + 17467)) / (1006 / (1006 + 27398))
=0.04468388 / 0.03541755
=1.2616

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)
=(584 / 7156) / (541 / 7069)
=0.08160984 / 0.07653133
=1.0664

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)
=((19922 + 2931) / 49807) / ((10359 + 2086) / 26455)
=0.45883109 / 0.47042147
=0.9754

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
=(1907 - 2694 - 1619) / 49807
=-0.0483

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.

Williams Companies Inc has a M-score of -1.77 signals that the company is likely to 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.

Williams Companies Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.17851.44520.63931.07750.67551.28731.30910.62071.14411.069
GMI 11113.81820.99450.6970.99670.95770.9924
AQI 1.05160.98620.77760.72941.04850.75890.77271.41422.320.9367
SGI 0.74840.78490.95071.12761.13390.69430.80411.19460.9440.9164
DEPI 1.24340.94320.94730.89820.97780.94151.02520.60922.50951.0878
SGAI 1.24951.13120.96961.07370.94371.93190.92720.79221.26810.9785
LVGI 0.83651.01660.88991.00310.88570.98591.05361.36020.82960.973
TATA -0.0465-0.0384-0.0633-0.0547-0.0817-0.0923-0.1329-0.18-0.0478-0.0738
M-score -2.70-2.48-3.21-2.69-1.49-3.18-3.25-3.46-1.93-2.84

Williams Companies Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.49240.41111.14411.31621.21061.03261.0690.92671.01131.6107
GMI 1.01371.01660.95831.02140.95690.94931.09661.12641.24481.2507
AQI 2.52492.48622.321.84241.24041.25420.93670.93471.3821.5119
SGI 1.41461.46070.9440.90080.90650.91570.91640.93430.93221.0123
DEPI 0.88931.13822.50952.17961.80061.43891.08781.09721.08931.2616
SGAI 0.91071.01511.26281.33021.1971.13840.97850.98831.06291.0664
LVGI 1.15781.16830.82960.88130.97340.91840.9731.05521.03430.9754
TATA -0.1075-0.0964-0.0478-0.0571-0.0662-0.0694-0.0738-0.0675-0.0451-0.0483
M-score -2.51-2.49-1.93-2.08-2.54-2.72-2.79-2.89-2.47-1.77
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