Switch to:
Willis Group Holdings PLC (NYSE:WSH)
Beneish M-Score
-2.33 (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.

Willis Group Holdings PLC has a M-score of -2.33 suggests that the company is not a manipulator.

WSH' s 10-Year Beneish M-Score Range
Min: -3.34   Max: -2.19
Current: -2.33

-3.34
-2.19

During the past 13 years, the highest Beneish M-Score of Willis Group Holdings PLC was -2.19. The lowest was -3.34. And the median was -2.42.


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 Willis Group Holdings PLC 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 * 1.0717+0.528 * 1+0.404 * 1.0381+0.892 * 1.052+0.115 * 1.0536
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8277+4.679 * -0.0047-0.327 * 0.9616
=-2.33

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $1,185 Mil.
Revenue was 1097 + 919 + 795 + 890 = $3,701 Mil.
Gross Profit was 1097 + 919 + 795 + 890 = $3,701 Mil.
Total Current Assets was $11,445 Mil.
Total Assets was $15,828 Mil.
Property, Plant and Equipment(Net PPE) was $482 Mil.
Depreciation, Depletion and Amortization(DDA) was $145 Mil.
Selling, General & Admin. Expense(SGA) was $2,209 Mil.
Total Current Liabilities was $10,276 Mil.
Long-Term Debt was $2,307 Mil.
Net Income was 246 + 68 + -27 + 105 = $392 Mil.
Non Operating Income was 0 + 0 + -60 + 0 = $-60 Mil.
Cash Flow from Operations was 5 + 195 + 229 + 98 = $527 Mil.
Accounts Receivable was $1,051 Mil.
Revenue was 1051 + 871 + 754 + 842 = $3,518 Mil.
Gross Profit was 1051 + 871 + 754 + 842 = $3,518 Mil.
Total Current Assets was $11,630 Mil.
Total Assets was $15,837 Mil.
Property, Plant and Equipment(Net PPE) was $447 Mil.
Depreciation, Depletion and Amortization(DDA) was $144 Mil.
Selling, General & Admin. Expense(SGA) was $2,537 Mil.
Total Current Liabilities was $10,706 Mil.
Long-Term Debt was $2,387 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)
=(1185 / 3701) / (1051 / 3518)
=0.32018373 / 0.29874929
=1.0717

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)
=(919 / 3518) / (1097 / 3701)
=1 / 1
=1

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 - (11445 + 482) / 15828) / (1 - (11630 + 447) / 15837)
=0.24646197 / 0.2374187
=1.0381

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
=3701 / 3518
=1.052

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))
=(144 / (144 + 447)) / (145 / (145 + 482))
=0.24365482 / 0.23125997
=1.0536

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)
=(2209 / 3701) / (2537 / 3518)
=0.59686571 / 0.72114838
=0.8277

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)
=((2307 + 10276) / 15828) / ((2387 + 10706) / 15837)
=0.79498357 / 0.82673486
=0.9616

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
=(392 - -60 - 527) / 15828
=-0.0047

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.

Willis Group Holdings PLC has a M-score of -2.33 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.

Willis Group Holdings PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.95651.10091.01860.88641.01040.07741.00691.04841.01561.0623
GMI 1111111111
AQI 1.12610.94540.99771.16361.47240.91911.00210.99990.89941.0507
SGI 1.09590.99651.0711.06181.09661.15421.02111.03451.00961.0503
DEPI 0.85280.78220.74111.58120.77380.70441.1531.06381.13790.9629
SGAI 1.02821.11580.99740.94030.78290.96631.00131.081.17470.849
LVGI 0.98881.03181.00720.99720.97130.98650.97051.00051.05390.9604
TATA 0.00280.01190.01410.00840.00480.0012-0.0021-0.0041-0.0643-0.0092
M-score -2.39-2.41-2.37-2.35-2.15-3.24-2.44-2.43-2.83-2.37

Willis Group Holdings PLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.99180.97281.00481.01561.02240.98371.0091.06231.07171.0714
GMI 1111111111
AQI 0.98640.99330.95840.89940.91230.94460.95871.05071.03811.0072
SGI 1.02551.00150.99191.00961.01881.03841.05221.05031.0521.0505
DEPI 1.11551.11571.1541.13791.00970.99830.99990.96291.05361.068
SGAI 0.99740.99410.99681.17471.23891.23241.22680.8490.82770.8366
LVGI 0.98930.99651.00281.05391.04461.02751.02580.96040.96160.9775
TATA -0.0058-0.003-0.0055-0.0643-0.0602-0.0602-0.0672-0.0092-0.0047-0.0108
M-score -2.48-2.50-2.51-2.83-2.81-2.81-2.80-2.37-2.33-2.37
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK