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Williams Companies Inc (NYSE:WMB)
Beneish M-Score
-3.04 (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 -3.04 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: -3.04

-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 -2.50.


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 * 0.9522+0.528 * 0.7823+0.404 * 0.9026+0.892 * 0.9605+0.115 * 0.8347
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.128+4.679 * -0.0522-0.327 * 1.1401
=-3.04

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $739 Mil.
Revenue was 1660 + 2006 + 1799 + 1839 = $7,304 Mil.
Gross Profit was 951 + 1181 + 970 + 1345 = $4,447 Mil.
Total Current Assets was $1,261 Mil.
Total Assets was $48,807 Mil.
Property, Plant and Equipment(Net PPE) was $29,823 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,756 Mil.
Selling, General & Admin. Expense(SGA) was $766 Mil.
Total Current Liabilities was $2,789 Mil.
Long-Term Debt was $23,701 Mil.
Net Income was -65 + -715 + -40 + 114 = $-706 Mil.
Non Operating Income was 18 + -767 + -331 + 136 = $-944 Mil.
Cash Flow from Operations was 779 + 592 + 603 + 814 = $2,788 Mil.
Accounts Receivable was $808 Mil.
Revenue was 1716 + 2141 + 2069 + 1678 = $7,604 Mil.
Gross Profit was 867 + 951 + 850 + 954 = $3,622 Mil.
Total Current Assets was $1,622 Mil.
Total Assets was $50,457 Mil.
Property, Plant and Equipment(Net PPE) was $28,536 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,389 Mil.
Selling, General & Admin. Expense(SGA) was $707 Mil.
Total Current Liabilities was $2,330 Mil.
Long-Term Debt was $21,690 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)
=(739 / 7304) / (808 / 7604)
=0.10117744 / 0.10625986
=0.9522

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)
=(3622 / 7604) / (4447 / 7304)
=0.47632825 / 0.60884447
=0.7823

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 - (1261 + 29823) / 48807) / (1 - (1622 + 28536) / 50457)
=0.36312414 / 0.40230295
=0.9026

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
=7304 / 7604
=0.9605

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))
=(1389 / (1389 + 28536)) / (1756 / (1756 + 29823))
=0.04641604 / 0.05560657
=0.8347

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)
=(766 / 7304) / (707 / 7604)
=0.10487404 / 0.09297738
=1.128

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)
=((23701 + 2789) / 48807) / ((21690 + 2330) / 50457)
=0.54275002 / 0.47604891
=1.1401

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
=(-706 - -944 - 2788) / 48807
=-0.0522

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 -3.04 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 0.64751.35950.65471.33730.52291.55421.14411.0691.5180.9484
GMI 1113.79711.04170.84230.75830.99240.97340.7681
AQI 0.77760.72941.04850.75893.80580.28712.320.93671.52010.9001
SGI 0.93880.89381.16990.66831.16490.82470.9440.91641.11330.9637
DEPI 0.94750.89760.95680.96220.64270.99942.33441.13711.06580.7243
SGAI 1.28921.21640.68161.52011.20550.86351.18140.97851.15971.1632
LVGI 0.88991.00310.88570.98591.05361.36020.82960.9730.94181.1599
TATA -0.0654-0.0621-0.0825-0.0923-0.1337-0.18-0.0478-0.0738-0.0548-0.048
M-score -3.27-2.69-2.93-1.61-2.34-3.43-2.04-2.84-1.96-3.06

Williams Companies Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0690.92671.01131.61071.5181.0980.98630.70470.94840.9522
GMI 1.09661.00191.10661.30510.7380.83250.7740.66420.8250.7823
AQI 0.93670.93471.3821.51191.52011.53531.05350.95940.90010.9026
SGI 0.91640.93430.93221.01231.11331.11841.15721.04740.96370.9605
DEPI 1.08781.09721.08931.26161.06580.9130.79660.6620.72430.8347
SGAI 0.97850.98831.06291.06641.15971.19271.18561.22781.16321.128
LVGI 0.9731.05521.03430.97540.94180.91990.95421.10061.15991.1401
TATA -0.0738-0.0675-0.0451-0.0483-0.0548-0.0625-0.0728-0.0543-0.048-0.0522
M-score -2.79-2.95-2.54-1.74-2.09-2.47-2.83-3.27-3.03-3.04
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