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GuruFocus has detected 5 Warning Signs with Westport Fuel Systems Inc $WPRT.
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Westport Fuel Systems Inc (NAS:WPRT)
Beneish M-Score
-2.46 (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.

Westport Fuel Systems Inc has a M-score of -2.45 suggests that the company is not a manipulator.

WPRT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.96   Max: 229.07
Current: -2.46

-3.96
229.07

During the past 13 years, the highest Beneish M-Score of Westport Fuel Systems Inc was 229.07. The lowest was -3.96. And the median was -2.77.


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 Fuel Systems 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 * 0.9901+0.528 * 0.8309+0.404 * 0.5679+0.892 * 2.177+0.115 * 1.1486
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6028+4.679 * -0.1804-0.327 * 0.9661
=-2.45

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $70.0 Mil.
Revenue was 80.399 + 76.127 + 44.357 + 24.011 = $224.9 Mil.
Gross Profit was 18.677 + 13.286 + 10.001 + 6.763 = $48.7 Mil.
Total Current Assets was $213.8 Mil.
Total Assets was $331.5 Mil.
Property, Plant and Equipment(Net PPE) was $59.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $16.0 Mil.
Selling, General & Admin. Expense(SGA) was $69.2 Mil.
Total Current Liabilities was $159.7 Mil.
Long-Term Debt was $30.9 Mil.
Net Income was -44.76 + -33.255 + 3.722 + -23.279 = $-97.6 Mil.
Non Operating Income was -6.769 + 2.317 + 44.289 + 2.003 = $41.8 Mil.
Cash Flow from Operations was -5.452 + -27.24 + -23.849 + -23.088 = $-79.6 Mil.
Accounts Receivable was $32.5 Mil.
Revenue was 25.109 + 22.327 + 27.846 + 28.022 = $103.3 Mil.
Gross Profit was 3.055 + 0.832 + 9.287 + 5.424 = $18.6 Mil.
Total Current Assets was $105.3 Mil.
Total Assets was $213.7 Mil.
Property, Plant and Equipment(Net PPE) was $42.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.7 Mil.
Selling, General & Admin. Expense(SGA) was $52.7 Mil.
Total Current Liabilities was $73.0 Mil.
Long-Term Debt was $54.2 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)
=(70.042 / 224.894) / (32.495 / 103.304)
=0.3114445 / 0.31455704
=0.9901

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)
=(18.598 / 103.304) / (48.727 / 224.894)
=0.18003175 / 0.21666652
=0.8309

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 - (213.762 + 59.682) / 331.46) / (1 - (105.298 + 42.527) / 213.683)
=0.17503168 / 0.30820421
=0.5679

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
=224.894 / 103.304
=2.177

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))
=(13.654 / (13.654 + 42.527)) / (16.017 / (16.017 + 59.682))
=0.2430359 / 0.211588
=1.1486

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)
=(69.153 / 224.894) / (52.697 / 103.304)
=0.30749153 / 0.51011577
=0.6028

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)
=((30.935 + 159.74) / 331.46) / ((54.19 + 73.044) / 213.683)
=0.57525795 / 0.59543342
=0.9661

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
=(-97.572 - 41.84 - -79.629) / 331.46
=-0.1804

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 Fuel Systems Inc has a M-score of -2.45 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 local exchange's currency.

Westport Fuel Systems Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Dec12Dec13Dec14Dec15Dec16
DSRI 1.27680.54610.47372.0121.07192.54541.25160.97031.0140.9901
GMI 0.93691.16111.2330.80290.82461.1293.65080.41371.29220.8138
AQI 0.81311.08940.18930.49953.21892.52470.92211.26521.14510.5679
SGI 1.40341.32571.57141.11391.21711.05111.0540.7960.79122.177
DEPI 1.53380.90281.33020.91791.09061.35790.84080.801311.1487
SGAI 0.93811.00440.90111.13961.07451.88220.9521.09961.01210.6028
LVGI 1.03940.6850.88660.84190.84711.1491.03681.52471.39190.9661
TATA -0.0858-0.0492-0.2378-0.1114-0.0695-0.0621-0.1669-0.17-0.2229-0.1798
M-score -2.32-2.63-3.68-2.26-1.69-0.78-1.64-3.90-3.61-2.46

Westport Fuel Systems Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.9260.97091.17461.28861.26231.01331.22761.74771.25930.9901
GMI 2.81020.41350.58710.83131.01431.25640.95210.9480.54420.8309
AQI 0.74951.26521.1871.19730.9861.14511.08040.52280.55630.5679
SGI 1.02860.79550.68190.61370.67820.79170.83741.06671.60632.177
DEPI 0.7510.80130.8050.82860.91911.07861.56961.33281.1486
SGAI 0.75861.10041.19151.34211.24811.01151.06020.97120.72320.6028
LVGI 1.07361.52471.54631.45041.6411.39191.42591.04470.99520.9661
TATA -0.2017-0.17-0.198-0.207-0.3879-0.225-0.2355-0.1463-0.1147-0.1804
M-score -2.62-3.90-3.91-3.76-4.60-3.64-3.65-2.58-2.57-2.45
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