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Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

WMB' s 10-Year Beneish M-Score Range
Min: -3.57   Max: 50.34
Current: -2.8

-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 * 0.9863+0.528 * 0.8277+0.404 * 1.0535+0.892 * 1.1572+0.115 * 0.7966
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1856+4.679 * -0.0728-0.327 * 0.9542
=-2.80

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $751 Mil.
Revenue was 1839 + 1716 + 2141 + 2069 = $7,765 Mil.
Gross Profit was 1345 + 1254 + 1425 + 1262 = $5,286 Mil.
Total Current Assets was $1,426 Mil.
Total Assets was $51,163 Mil.
Property, Plant and Equipment(Net PPE) was $29,089 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,603 Mil.
Selling, General & Admin. Expense(SGA) was $745 Mil.
Total Current Liabilities was $3,768 Mil.
Long-Term Debt was $21,285 Mil.
Net Income was 114 + 70 + 193 + 1678 = $2,055 Mil.
Non Operating Income was 136 + 67 + 127 + 2609 = $2,939 Mil.
Cash Flow from Operations was 814 + 669 + 1011 + 345 = $2,839 Mil.
Accounts Receivable was $658 Mil.
Revenue was 1678 + 1749 + 1660 + 1623 = $6,710 Mil.
Gross Profit was 954 + 980 + 934 + 913 = $3,781 Mil.
Total Current Assets was $2,119 Mil.
Total Assets was $34,949 Mil.
Property, Plant and Equipment(Net PPE) was $19,442 Mil.
Depreciation, Depletion and Amortization(DDA) was $844 Mil.
Selling, General & Admin. Expense(SGA) was $543 Mil.
Total Current Liabilities was $2,396 Mil.
Long-Term Debt was $15,539 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)
=(751 / 7765) / (658 / 6710)
=0.09671603 / 0.09806259
=0.9863

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)
=(1254 / 6710) / (1345 / 7765)
=0.56348733 / 0.68074694
=0.8277

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 - (1426 + 29089) / 51163) / (1 - (2119 + 19442) / 34949)
=0.40357289 / 0.38307248
=1.0535

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
=7765 / 6710
=1.1572

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))
=(844 / (844 + 19442)) / (1603 / (1603 + 29089))
=0.04160505 / 0.05222859
=0.7966

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)
=(745 / 7765) / (543 / 6710)
=0.09594334 / 0.08092399
=1.1856

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)
=((21285 + 3768) / 51163) / ((15539 + 2396) / 34949)
=0.48967027 / 0.51317634
=0.9542

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
=(2055 - 2939 - 2839) / 51163
=-0.0728

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 -2.80 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 1113.81820.99450.90770.76540.95770.70840.9234
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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.31621.21061.03261.0690.92671.01131.61071.5181.0980.9863
GMI 1.02140.95690.94930.75990.71210.78550.82820.86080.86660.8277
AQI 1.84241.24041.25420.93670.93471.3821.51191.52491.53531.0535
SGI 0.90080.90650.91570.91640.93430.93221.01231.11331.11841.1572
DEPI 2.16081.76751.39081.08781.09721.08931.26161.06580.9130.7966
SGAI 1.33021.1971.13840.97850.98831.06291.06641.15971.19271.1856
LVGI 0.88130.97340.91840.9731.05521.03430.97540.94410.91990.9542
TATA -0.0571-0.0662-0.0694-0.0738-0.0675-0.0451-0.0483-0.0546-0.0625-0.0728
M-score -2.08-2.54-2.73-2.97-3.11-2.71-1.99-2.02-2.45-2.80
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