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Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-3.30 (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 -3.30 suggests that the company is not a manipulator.

WMB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.57   Max: 50.34
Current: -3.3

-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 -2.51.


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 * 0.7047+0.528 * 0.6073+0.404 * 0.9594+0.892 * 1.0474+0.115 * 0.662
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2278+4.679 * -0.0543-0.327 * 1.1006
=-3.30

* 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 $710 Mil.
Revenue was 1799 + 1839 + 1716 + 2141 = $7,495 Mil.
Gross Profit was 970 + 1345 + 1254 + 951 = $4,520 Mil.
Total Current Assets was $1,264 Mil.
Total Assets was $50,819 Mil.
Property, Plant and Equipment(Net PPE) was $29,476 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,666 Mil.
Selling, General & Admin. Expense(SGA) was $751 Mil.
Total Current Liabilities was $3,858 Mil.
Long-Term Debt was $21,805 Mil.
Net Income was -40 + 114 + 70 + 193 = $337 Mil.
Non Operating Income was -331 + 136 + 67 + 127 = $-1 Mil.
Cash Flow from Operations was 603 + 814 + 669 + 1011 = $3,097 Mil.
Accounts Receivable was $962 Mil.
Revenue was 2069 + 1678 + 1749 + 1660 = $7,156 Mil.
Gross Profit was 850 + 954 + 980 + -163 = $2,621 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.



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)
=(710 / 7495) / (962 / 7156)
=0.09472982 / 0.13443264
=0.7047

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)
=(1345 / 7156) / (970 / 7495)
=0.36626607 / 0.60306871
=0.6073

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 - (1264 + 29476) / 50819) / (1 - (1898 + 27398) / 49807)
=0.39510813 / 0.41180958
=0.9594

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
=7495 / 7156
=1.0474

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))
=(1006 / (1006 + 27398)) / (1666 / (1666 + 29476))
=0.03541755 / 0.05349689
=0.662

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)
=(751 / 7495) / (584 / 7156)
=0.10020013 / 0.08160984
=1.2278

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)
=((21805 + 3858) / 50819) / ((19922 + 2931) / 49807)
=0.50498829 / 0.45883109
=1.1006

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
=(337 - -1 - 3097) / 50819
=-0.0543

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 -3.30 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.

Williams Companies Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.44520.63931.07750.67551.28730.75741.07291.14411.0691.518
GMI 1113.81820.99450.90770.76540.95770.99240.9734
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 -2.48-3.21-2.69-1.49-3.18-2.47-3.57-1.93-2.84-1.96

Williams Companies Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.21061.03261.0690.92671.01131.61071.5181.0980.98630.7047
GMI 0.95690.94931.09661.00191.10661.30510.7380.75210.70590.6073
AQI 1.24041.25420.93670.93471.3821.51191.52491.53531.05350.9594
SGI 0.90650.91570.91640.93430.93221.01231.11331.11841.15721.0474
DEPI 1.76751.39081.08781.09721.08931.26161.06580.9130.79660.662
SGAI 1.1971.13840.97850.98831.06291.06641.15971.19271.18561.2278
LVGI 0.97340.91840.9731.05521.03430.97540.94410.91990.95421.1006
TATA -0.0662-0.0694-0.0738-0.0675-0.0451-0.0483-0.0546-0.0625-0.0728-0.0543
M-score -2.54-2.73-2.79-2.95-2.54-1.74-2.09-2.51-2.87-3.30
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