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Westport Innovations Inc (NAS:WPRT)
Beneish M-Score
-2.24 (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 Innovations Inc has a M-score of -2.26 suggests that the company is not a manipulator.

WPRT' s 10-Year Beneish M-Score Range
Min: -10000000   Max: 229.1
Current: -2.24

-10000000
229.1

During the past 13 years, the highest Beneish M-Score of Westport Innovations Inc was 229.10. The lowest was -10000000.00. And the median was -2.48.


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 * 0.9018+0.528 * 2.8854+0.404 * 0.7495+0.892 * 1.0561+0.115 * 0.751
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7388+4.679 * -0.1345-0.327 * 1.0736
=-2.26

* 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 + -22.88 = $-20.1 Mil.
Cash Flow from Operations was -31.377 + -28.937 + -23.093 + -17.879 = $-101.3 Mil.
Accounts Receivable was $43.9 Mil.
Revenue was 46.528 + 34.856 + 30.053 + 39.926 = $151.4 Mil.
Gross Profit was 16.057 + 8.257 + 8.095 + 13.423 = $45.8 Mil.
Total Current Assets was $201.8 Mil.
Total Assets was $420.0 Mil.
Property, Plant and Equipment(Net PPE) was $71.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.9 Mil.
Selling, General & Admin. Expense(SGA) was $84.3 Mil.
Total Current Liabilities was $76.9 Mil.
Long-Term Debt was $51.7 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) / (43.876 / 151.363)
=0.2614119 / 0.28987269
=0.9018

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 / 151.363) / (7.969 / 159.855)
=0.30279527 / 0.10493885
=2.8854

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 - (201.822 + 71.329) / 420.008)
=0.26205593 / 0.34965286
=0.7495

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 / 151.363
=1.0561

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))
=(14.939 / (14.939 + 71.329)) / (18.187 / (18.187 + 60.681))
=0.17316966 / 0.2306005
=0.751

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) / (84.298 / 151.363)
=0.41145413 / 0.55692607
=0.7388

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) / ((51.729 + 76.918) / 420.008)
=0.32882977 / 0.30629655
=1.0736

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 - -20.06 - -101.286) / 392.504
=-0.1345

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 -2.26 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 own currency.

Westport Innovations Inc Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Dec12Dec13
DSRI 0.54431.12120.80341.27680.54610.53611.77761.07192.54541.2891
GMI 1.06430.98620.90540.93691.16111.24420.79570.82461.1293.6508
AQI 1.25480.89051.46190.81311.08940.18930.49953.21892.52470.9221
SGI 1.47361.1511.31231.40341.32571.38831.26081.21711.05111.054
DEPI 0.71770.74741.27461.53380.90281.4510.84151.09061.35790.8408
SGAI 0.89070.71990.89080.93811.00440.86141.19211.07451.88220.952
LVGI 0.98221.37741.58471.03940.6850.88660.84190.84711.1491.0368
TATA -0.168-0.2081-0.12750.01570.0212-0.2096-0.1114-0.0695-0.0596-0.1133
M-score -3.13-3.36-2.98-1.84-2.30-3.63-2.36-1.69-0.77-1.35

Westport Innovations Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 4.45591.642811.06250.83721.06181.28911.05040.99350.9018
GMI 1.09151.02331.0470.88051.25371.13373.65083.15292.01932.8854
AQI 1.80820.62450.75821.3811.70961.84020.92210.91640.77080.7495
SGI 0.99180.56830.94870.9250.8161.30821.0541.17481.33631.0561
DEPI 1.19760.9326.1070.98361.10011.00710.84080.82150.79380.751
SGAI 1.06561.68871.94221.78322.05431.28890.9520.83030.64170.7388
LVGI 0.9910.62120.66141.09341.24041.20511.03680.96661.03391.0736
TATA 0.0124-0.0436-0.0603-0.0549-0.0836-0.03-0.1133-0.1251-0.1274-0.1345
M-score 1.14-2.62-2.34-2.82-3.01-1.99-1.35-1.74-2.31-2.26
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