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

Warning Sign:

Beneish M-Score 185.37 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 signals that the company is a manipulator.

WPRT' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 413.51
Current: 185.37

-10000000
413.51

During the past 13 years, the highest Beneish M-Score of Westport Innovations Inc was 413.51. The lowest was -10000000.00. And the median was -2.32.


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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $41.8 Mil.
Revenue was 25.301 + 40.036 + 41.923 + 52.595 = $159.9 Mil.
Gross Profit was 7.969 + 13.601 + 12.272 + -17.067 = $16.8 Mil.
Total Current Assets was $229.0 Mil.
Total Assets was $392.5 Mil.
Property, Plant and Equipment(Net PPE) was $60.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.2 Mil.
Selling, General & Admin. Expense(SGA) was $65.8 Mil.
Total Current Liabilities was $74.5 Mil.
Long-Term Debt was $54.6 Mil.
Net Income was -25.476 + -35.358 + -23.866 + -89.451 = $-174.2 Mil.
Non Operating Income was 2.135 + 1.041 + -0.356 + -27.96 = $-25.1 Mil.
Cash Flow from Operations was -31.377 + -28.937 + -23.093 + -17.879 = $-101.3 Mil.
Accounts Receivable was $ Mil.
Revenue was 46.528 + 34.856 + 30.053 + -115.221 = $ Mil.
Gross Profit was + + + = $ Mil.
Total Current Assets was $ Mil.
Total Assets was $ Mil.
Property, Plant and Equipment(Net PPE) was $ Mil.
Depreciation, Depletion and Amortization(DDA) was $ Mil.
Selling, General & Admin. Expense(SGA) was $ Mil.
Total Current Liabilities was $ Mil.
Long-Term Debt was $ 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)
=(41.788 / 159.855) / ( / -3.784)
=0.2614119 /
=

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)
=(13.601 / -3.784) / (7.969 / 159.855)
= / 0.10493885
=

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 - (228.965 + 60.681) / 392.504) / (1 - ( + 71.329) / )
=0.26205593 /
=

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
=159.855 / -3.784
=

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))
=(14.814 / (14.814 + 71.329)) / (18.187 / (18.187 + 60.681))
= / 0.2306005
=

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)
=(65.773 / 159.855) / ( / -3.784)
=0.41145413 /
=

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)
=((54.576 + 74.491) / 392.504) / (( + ) / )
=0.32882977 /
=

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
=(-174.151 - -25.14 - -101.286) / 392.504
=-0.1216

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 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 0.54431.12120.80341.27680.54610.53611.68061.21582.52041.2141
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 -3.13-3.36-2.98-1.84-2.30-3.62-2.40-1.57-0.81-1.42

Westport Innovations Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 2.68360.701812.17217.292513.40891.21410.6810.18940.1672
GMI 1.10351.05521.0470.960618.312817.73123.65083.03950.13670.1789
AQI 1.80820.62450.75821.3811.70961.84020.92210.91640.77080.8497
SGI 1.64691.33050.94870.45250.0937-0.0141.0541.81217.01036.1885
DEPI 1.2160.93276.1070.9891.11081.02380.84080.81960.79030.7399
SGAI 0.66560.79291.80123.366114.859813.51130.93720.54990.13050.1397
LVGI 0.9910.62120.66141.09341.24041.20511.03680.96661.03391.0434
TATA -0.0036-0.0677-0.0596-0.0307-0.0687-0.0003-0.1072-0.1183-0.1131-0.1216
M-score 0.10-2.75-2.32-2.349.1614.99-1.39-1.491.170.42
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