Switch to:
Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

WMB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: -1
Current: -3.06

-3.45
-1

During the past 13 years, the highest Beneish M-Score of Williams Companies Inc was -1.00. The lowest was -3.45. And the median was -2.45.


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 * 0.9484+0.528 * 0.7578+0.404 * 0.9001+0.892 * 0.9637+0.115 * 0.7243
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1632+4.679 * -0.048-0.327 * 1.1599
=-3.06

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,041 Mil.
Revenue was 2006 + 1799 + 1839 + 1716 = $7,360 Mil.
Gross Profit was 1181 + 970 + 1345 + 1254 = $4,750 Mil.
Total Current Assets was $1,527 Mil.
Total Assets was $49,020 Mil.
Property, Plant and Equipment(Net PPE) was $29,579 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,738 Mil.
Selling, General & Admin. Expense(SGA) was $741 Mil.
Total Current Liabilities was $2,497 Mil.
Long-Term Debt was $23,812 Mil.
Net Income was -715 + -40 + 114 + 70 = $-571 Mil.
Non Operating Income was -767 + -331 + 136 + 67 = $-895 Mil.
Cash Flow from Operations was 592 + 603 + 814 + 669 = $2,678 Mil.
Accounts Receivable was $1,139 Mil.
Revenue was 2141 + 2069 + 1678 + 1749 = $7,637 Mil.
Gross Profit was 951 + 850 + 954 + 980 = $3,735 Mil.
Total Current Assets was $1,890 Mil.
Total Assets was $50,455 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 $20,780 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)
=(1041 / 7360) / (1139 / 7637)
=0.14144022 / 0.14914233
=0.9484

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)
=(970 / 7637) / (1181 / 7360)
=0.48906639 / 0.64538043
=0.7578

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 - (1527 + 29579) / 49020) / (1 - (1890 + 28081) / 50455)
=0.36544268 / 0.40598553
=0.9001

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
=7360 / 7637
=0.9637

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))
=(1176 / (1176 + 28081)) / (1738 / (1738 + 29579))
=0.04019551 / 0.05549701
=0.7243

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)
=(741 / 7360) / (661 / 7637)
=0.10067935 / 0.08655231
=1.1632

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)
=((23812 + 2497) / 49020) / ((20780 + 2567) / 50455)
=0.53669931 / 0.46272916
=1.1599

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
=(-571 - -895 - 2678) / 49020
=-0.048

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 -3.06 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.63931.07750.67552.01340.48431.07291.14411.0691.5180.9484
GMI 113.81820.88270.78530.99670.95770.99240.97340.7681
AQI 0.77760.72941.04850.75893.80580.28712.320.93671.52010.9001
SGI 0.95071.12761.13390.44391.25771.19460.9440.91641.11330.9637
DEPI 0.94730.89820.97780.94150.62511.02752.44011.08781.06580.7243
SGAI 0.96961.07370.94372.2080.81120.79221.26810.97851.15971.1632
LVGI 0.88991.00310.88570.98591.05361.36020.82960.9730.94181.1599
TATA -0.0618-0.0605-0.0817-0.092-0.1329-0.18-0.0478-0.0738-0.0548-0.048
M-score -3.20-2.71-1.49-2.84-2.35-3.45-1.93-2.84-1.96-3.06

Williams Companies Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.03261.0690.92671.01131.61071.5181.0980.98630.70470.9484
GMI 0.94931.09661.00191.10661.30510.7380.75210.70590.60730.7578
AQI 1.25420.93670.93471.3821.51191.52011.53531.05350.95940.9001
SGI 0.91570.91640.93430.93221.01231.11331.11841.15721.04740.9637
DEPI 1.32081.08781.09721.08931.26161.06580.9130.79660.6620.7243
SGAI 1.13840.97850.98831.06291.06641.15971.19271.18561.22781.1632
LVGI 0.91840.9731.05521.03430.97540.94180.91990.95421.10061.1599
TATA -0.0694-0.0738-0.0675-0.0451-0.0483-0.0548-0.0625-0.0728-0.0543-0.048
M-score -2.73-2.79-2.95-2.54-1.74-2.09-2.51-2.87-3.30-3.06
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK