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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.
Westport Innovations Inc has a M-score of -1.56 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Westport Innovations Inc was 215.86. The lowest was -10000000.00. And the median was -2.28.
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 * 0.7903||+||0.528 * 3.1976||+||0.404 * 0.9164||+||0.892 * 1.602||+||0.115 * 0.8215|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9049||+||4.679 * -0.1183||-||0.327 * 0.9666|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $48.5 Mil.|
Revenue was 41.923 + 52.595 + 46.528 + 34.856 = $175.9 Mil.
Gross Profit was 12.272 + -17.067 + 16.057 + 8.257 = $19.5 Mil.
Total Current Assets was $279.4 Mil.
Total Assets was $448.3 Mil.
Property, Plant and Equipment(Net PPE) was $66.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $17.0 Mil.
Selling, General & Admin. Expense(SGA) was $74.3 Mil.
Total Current Liabilities was $115.2 Mil.
Long-Term Debt was $10.8 Mil.
Net Income was -23.866 + -89.451 + -30.225 + -33.935 = $-177.5 Mil.
Non Operating Income was -0.356 + -27.96 + 2.347 + 7.999 = $-18.0 Mil.
Cash Flow from Operations was -23.093 + -17.879 + -33.756 + -31.731 = $-106.5 Mil.
|Accounts Receivable was $38.3 Mil.
Revenue was 30.053 + 0 + 30.674 + 49.074 = $109.8 Mil.
Gross Profit was 8.095 + 0 + 7.796 + 23.069 = $39.0 Mil.
Total Current Assets was $271.5 Mil.
Total Assets was $444.5 Mil.
Property, Plant and Equipment(Net PPE) was $61.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.5 Mil.
Selling, General & Admin. Expense(SGA) was $51.3 Mil.
Total Current Liabilities was $80.0 Mil.
Long-Term Debt was $49.3 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)|
|=||(48.535 / 175.902)||/||(38.336 / 109.801)|
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)|
|=||(-17.067 / 109.801)||/||(12.272 / 175.902)|
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 - (279.436 + 66.115) / 448.306)||/||(1 - (271.458 + 61.846) / 444.477)|
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))|
|=||(12.506 / (12.506 + 61.846))||/||(17.023 / (17.023 + 66.115))|
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)|
|=||(74.349 / 175.902)||/||(51.286 / 109.801)|
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)|
|=||((10.815 + 115.212) / 448.306)||/||((49.278 + 79.989) / 444.477)|
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|
|=||(-177.477 - -17.97||-||-106.459)||/||448.306|
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 -1.56 signals that the company is likely to 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
Westport Innovations Inc Annual Data
Westport Innovations Inc Quarterly Data