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Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-1.99 (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 -1.99 signals that the company is a manipulator.

WMB' s 10-Year Beneish M-Score Range
Min: -3.57   Max: -1.08
Current: -1.99

-3.57
-1.08

During the past 13 years, the highest Beneish M-Score of Williams Companies Inc was -1.08. 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 * 1.518+0.528 * 0.9201+0.404 * 1.5249+0.892 * 1.1133+0.115 * 1.0658
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1597+4.679 * -0.0546-0.327 * 0.9441
=-1.99

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,139 Mil.
Revenue was 2141 + 2069 + 1678 + 1749 = $7,637 Mil.
Gross Profit was 1425 + 1262 + 954 + 682 = $4,323 Mil.
Total Current Assets was $1,890 Mil.
Total Assets was $50,563 Mil.
Property, Plant and Equipment(Net PPE) was $28,081 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,176 Mil.
Selling, General & Admin. Expense(SGA) was $661 Mil.
Total Current Liabilities was $2,567 Mil.
Long-Term Debt was $20,888 Mil.
Net Income was 193 + 1678 + 103 + 140 = $2,114 Mil.
Non Operating Income was 127 + 2609 + 59 + -33 = $2,762 Mil.
Cash Flow from Operations was 1011 + 345 + 313 + 446 = $2,115 Mil.
Accounts Receivable was $674 Mil.
Revenue was 1660 + 1623 + 1767 + 1810 = $6,860 Mil.
Gross Profit was 934 + 913 + 966 + 760 = $3,573 Mil.
Total Current Assets was $1,683 Mil.
Total Assets was $27,142 Mil.
Property, Plant and Equipment(Net PPE) was $18,210 Mil.
Depreciation, Depletion and Amortization(DDA) was $815 Mil.
Selling, General & Admin. Expense(SGA) was $512 Mil.
Total Current Liabilities was $1,983 Mil.
Long-Term Debt was $11,353 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)
=(1139 / 7637) / (674 / 6860)
=0.14914233 / 0.09825073
=1.518

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)
=(1262 / 6860) / (1425 / 7637)
=0.52084548 / 0.56605997
=0.9201

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 - (1890 + 28081) / 50563) / (1 - (1683 + 18210) / 27142)
=0.40725432 / 0.26707686
=1.5249

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
=7637 / 6860
=1.1133

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))
=(815 / (815 + 18210)) / (1176 / (1176 + 28081))
=0.04283837 / 0.04019551
=1.0658

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)
=(661 / 7637) / (512 / 6860)
=0.08655231 / 0.07463557
=1.1597

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)
=((20888 + 2567) / 50563) / ((11353 + 1983) / 27142)
=0.46387675 / 0.49134183
=0.9441

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
=(2114 - 2762 - 2115) / 50563
=-0.0546

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 -1.99 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.44520.63931.07750.67551.28730.75741.07291.14411.0691.518
GMI 1113.81820.99450.90770.76540.95770.70840.9234
AQI 0.98620.77760.72941.04850.75893.80580.28712.320.93671.5249
SGI 0.78490.95071.12761.13390.69430.80411.19460.9440.91641.1133
DEPI 0.94320.94730.89820.97780.94150.64270.97182.50951.08781.0658
SGAI 1.13120.96961.07370.94371.93190.98240.74771.26810.97851.1597
LVGI 1.01660.88991.00310.88570.98591.05361.36020.82960.9730.9441
TATA -0.0384-0.0633-0.0547-0.0817-0.0923-0.1329-0.18-0.0478-0.0738-0.0546
M-score -2.48-3.21-2.69-1.49-3.18-2.47-3.57-1.93-2.99-1.99

Williams Companies Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.41111.14411.31621.21061.03261.0690.92671.01131.61071.518
GMI 0.77390.95831.02140.95690.94930.75990.77280.85270.89260.9201
AQI 2.48622.321.84241.24041.25420.93670.93471.3821.51191.5249
SGI 1.46070.9440.90080.90650.91570.91640.93430.93221.01231.1133
DEPI 1.16972.50952.16081.76751.39081.08781.09721.08931.26161.0658
SGAI 0.9351.26281.33021.1971.13840.97850.98831.06291.06641.1597
LVGI 1.16830.82960.88130.97340.91840.9731.05521.03430.97540.9441
TATA -0.0964-0.0478-0.0571-0.0662-0.0694-0.0738-0.0675-0.0451-0.0483-0.0546
M-score -2.61-1.93-2.08-2.54-2.73-2.97-3.07-2.68-1.96-1.99
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