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Westport Innovations Inc (NAS:WPRT)
Beneish M-Score
1.24 (As of Today)

Warning Sign:

Beneish M-Score 1.24 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Westport Innovations Inc has a M-score of 1.16 signals that the company is a manipulator.

WPRT' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 231.02
Current: 1.24

-10000000
231.02

During the past 13 years, the highest Beneish M-Score of Westport Innovations Inc was 231.02. The lowest was -10000000.00. And the median was -2.16.


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 Westport Innovations 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 * 0.1789+0.528 * 0.1367+0.404 * 0.7708+0.892 * 7.0103+0.115 * 0.7903
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.1305+4.679 * -0.1131-0.327 * 1.0339
=1.16

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $56.3 Mil.
Revenue was 40.036 + 41.923 + 52.595 + 46.528 = $181.1 Mil.
Gross Profit was 13.601 + 12.272 + -17.067 + 16.057 = $24.9 Mil.
Total Current Assets was $274.5 Mil.
Total Assets was $445.0 Mil.
Property, Plant and Equipment(Net PPE) was $64.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.8 Mil.
Selling, General & Admin. Expense(SGA) was $69.6 Mil.
Total Current Liabilities was $86.9 Mil.
Long-Term Debt was $58.1 Mil.
Net Income was -35.358 + -23.866 + -89.451 + -30.225 = $-178.9 Mil.
Non Operating Income was 1.041 + -0.356 + -27.96 + 2.347 = $-24.9 Mil.
Cash Flow from Operations was -28.937 + -23.093 + -17.879 + -33.756 = $-103.7 Mil.
Accounts Receivable was $44.9 Mil.
Revenue was 34.856 + 30.053 + -115.221 + 76.143 = $25.8 Mil.
Gross Profit was 8.257 + 8.095 + -37.03 + 21.163 = $0.5 Mil.
Total Current Assets was $245.2 Mil.
Total Assets was $449.5 Mil.
Property, Plant and Equipment(Net PPE) was $65.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.5 Mil.
Selling, General & Admin. Expense(SGA) was $76.1 Mil.
Total Current Liabilities was $93.7 Mil.
Long-Term Debt was $47.9 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)
=(56.326 / 181.082) / (44.903 / 25.831)
=0.31105245 / 1.73833766
=0.1789

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)
=(12.272 / 25.831) / (13.601 / 181.082)
=0.01877589 / 0.13730244
=0.1367

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 - (274.477 + 64.714) / 444.983) / (1 - (245.23 + 65.609) / 449.461)
=0.23774391 / 0.30841831
=0.7708

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
=181.082 / 25.831
=7.0103

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))
=(13.497 / (13.497 + 65.609)) / (17.817 / (17.817 + 64.714))
=0.17061917 / 0.21588252
=0.7903

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)
=(69.582 / 181.082) / (76.081 / 25.831)
=0.38425686 / 2.945337
=0.1305

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)
=((58.123 + 86.86) / 444.983) / ((47.925 + 93.718) / 449.461)
=0.32581694 / 0.31513969
=1.0339

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
=(-178.9 - -24.928 - -103.665) / 444.983
=-0.1131

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.

Westport Innovations Inc has a M-score of 1.16 signals that the company is likely to 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.

Westport Innovations Inc Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Dec12Dec13
DSRI 0.54431.12120.80341.27681.07240.75091.32411.06091.39511.2735
GMI 1.06430.98620.90540.93691.16111.24420.79940.82081.1293.6508
AQI 1.25480.89051.46190.81311.08940.18930.49943.37512.40820.9221
SGI 1.47361.1511.31231.40341.32571.38831.32891.15471.05111.054
DEPI 0.71770.74741.27461.53380.90281.4510.79941.11311.40060.8408
SGAI 0.89070.71990.89080.93811.00440.83721.2291.18211.73440.9372
LVGI 0.98221.37741.58471.03940.6850.88660.84190.84531.15131.0368
TATA -0.168-0.2081-0.12750.01570.0212-0.2096-0.112-0.07-0.0596-0.1133
M-score -3.13-3.36-2.98-1.84-1.81-3.43-2.73-1.72-1.84-1.36

Westport Innovations Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.66151.43750.72991.16795.91027.2681.27350.69870.1789
GMI 1.18991.10351.05520.960618.312817.73123.65083.03950.1367
AQI 1.89061.80820.62451.3811.70961.84020.92210.91640.7708
SGI 1.44881.64691.33050.45250.0937-0.0141.0541.81217.0103
DEPI 1.281.14330.87731.06771.18151.08830.84080.81960.7903
SGAI 0.79910.66560.79293.366114.859813.51130.93720.54990.1305
LVGI 1.13170.9910.62121.09341.24041.20511.03680.96661.0339
TATA 0.00660.0226-0.0407-0.0307-0.06120.0078-0.1003-0.1108-0.1131
M-score -0.96-0.94-2.60-3.257.939.38-1.30-1.441.16
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