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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.
Wausau Paper Corp has a M-score of -2.64 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Wausau Paper Corp was -1.64. The lowest was -4.19. And the median was -2.61.
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 Wausau Paper Corp 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 * 1.9274||+||0.528 * 0.2947||+||0.404 * 0.842||+||0.892 * 0.5226||+||0.115 * 1.1408|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2643||+||4.679 * -0.0204||-||0.327 * 1.0867|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $25.0 Mil.|
Revenue was 89.214 + 77.507 + 91.104 + 91.663 = $349.5 Mil.
Gross Profit was 11.56 + 8.209 + 15.14 + 13.373 = $48.3 Mil.
Total Current Assets was $86.7 Mil.
Total Assets was $458.8 Mil.
Property, Plant and Equipment(Net PPE) was $293.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $102.3 Mil.
Selling, General & Admin. Expense(SGA) was $54.4 Mil.
Total Current Liabilities was $65.6 Mil.
Long-Term Debt was $150.0 Mil.
Net Income was -3.828 + -4.9 + -9.982 + -2.852 = $-21.6 Mil.
Non Operating Income was -0.02 + 0.023 + 0.011 + -0.01 = $0.0 Mil.
Cash Flow from Operations was 1.643 + -7.325 + 3.649 + -10.165 = $-12.2 Mil.
|Accounts Receivable was $24.8 Mil.
Revenue was 87.623 + 187.98 + 190.866 + 202.249 = $668.7 Mil.
Gross Profit was 9.813 + -21.237 + 17.11 + 21.543 = $27.2 Mil.
Total Current Assets was $128.8 Mil.
Total Assets was $526.1 Mil.
Property, Plant and Equipment(Net PPE) was $289.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $121.3 Mil.
Selling, General & Admin. Expense(SGA) was $82.3 Mil.
Total Current Liabilities was $77.5 Mil.
Long-Term Debt was $150.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(24.978 / 349.488)||/||(24.797 / 668.718)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(8.209 / 668.718)||/||(11.56 / 349.488)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (86.658 + 293.247) / 458.75)||/||(1 - (128.817 + 289.88) / 526.08)|
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.
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))|
|=||(121.302 / (121.302 + 289.88))||/||(102.281 / (102.281 + 293.247))|
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)|
|=||(54.403 / 349.488)||/||(82.336 / 668.718)|
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)|
|=||((150 + 65.586) / 458.75)||/||((150 + 77.511) / 526.08)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-21.562 - 0.004||-||-12.198)||/||458.75|
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.
Wausau Paper Corp has a M-score of -2.64 suggests that the company will not be a manipulator.
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
Wausau Paper Corp Annual Data
Wausau Paper Corp Quarterly Data