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Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

WMB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: 50.44
Current: -2.99

-3.45
50.44

During the past 13 years, the highest Beneish M-Score of Williams Companies Inc was 50.44. The lowest was -3.45. And the median was -2.52.


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 * 1.0597+0.528 * 0.8202+0.404 * 0.902+0.892 * 0.9274+0.115 * 0.8839
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0856+4.679 * -0.0611-0.327 * 1.152
=-2.99

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $738 Mil.
Revenue was 1736 + 1660 + 2006 + 1799 = $7,201 Mil.
Gross Profit was 941 + 951 + 1181 + 970 = $4,043 Mil.
Total Current Assets was $2,357 Mil.
Total Assets was $48,124 Mil.
Property, Plant and Equipment(Net PPE) was $28,249 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,774 Mil.
Selling, General & Admin. Expense(SGA) was $750 Mil.
Total Current Liabilities was $2,752 Mil.
Long-Term Debt was $24,394 Mil.
Net Income was -405 + -65 + -715 + -40 = $-1,225 Mil.
Non Operating Income was 136 + 18 + -767 + -331 = $-944 Mil.
Cash Flow from Operations was 685 + 779 + 592 + 603 = $2,659 Mil.
Accounts Receivable was $751 Mil.
Revenue was 1839 + 1716 + 2141 + 2069 = $7,765 Mil.
Gross Profit was 908 + 867 + 951 + 850 = $3,576 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.



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)
=(738 / 7201) / (751 / 7765)
=0.10248577 / 0.09671603
=1.0597

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)
=(3576 / 7765) / (4043 / 7201)
=0.46052801 / 0.5614498
=0.8202

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 - (2357 + 28249) / 48124) / (1 - (1426 + 29089) / 51163)
=0.36401795 / 0.40357289
=0.902

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
=7201 / 7765
=0.9274

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))
=(1603 / (1603 + 29089)) / (1774 / (1774 + 28249))
=0.05222859 / 0.05908803
=0.8839

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)
=(750 / 7201) / (745 / 7765)
=0.1041522 / 0.09594334
=1.0856

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)
=((24394 + 2752) / 48124) / ((21285 + 3768) / 51163)
=0.56408445 / 0.48967027
=1.152

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
=(-1225 - -944 - 2659) / 48124
=-0.0611

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 -2.99 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.92671.01131.61071.5181.0980.98630.70470.94840.95221.0597
GMI 1.00191.10661.30510.7380.83250.86860.74270.91680.86760.8202
AQI 0.93471.3821.51191.52011.53531.05350.95940.90010.90260.902
SGI 0.93430.93221.01231.11331.11841.15721.04740.96370.96050.9274
DEPI 1.09721.08931.26161.06580.9130.79660.6620.72430.83470.8839
SGAI 0.98831.06291.06641.15971.19271.18561.22781.16321.1281.0856
LVGI 1.05521.03430.97540.94180.91990.95421.10061.15991.14011.152
TATA -0.0675-0.0451-0.0483-0.0548-0.0625-0.0728-0.0543-0.048-0.0522-0.0611
M-score -2.95-2.54-1.74-2.09-2.47-2.78-3.23-2.98-3.00-2.99
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