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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-2.83 (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.

Weight Watchers International Inc has a M-score of -2.83 suggests that the company is not a manipulator.

WTW' s 10-Year Beneish M-Score Range
Min: -3.24   Max: -1.89
Current: -2.83

-3.24
-1.89

During the past 13 years, the highest Beneish M-Score of Weight Watchers International Inc was -1.89. The lowest was -3.24. And the median was -2.83.


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 Weight Watchers International 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 * 1.0943+0.528 * 1.075+0.404 * 0.9287+0.892 * 0.8536+0.115 * 0.845
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0666+4.679 * -0.0688-0.327 * 0.8919
=-2.83

* 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 $32 Mil.
Revenue was 345.184 + 397.547 + 409.358 + 366.111 = $1,518 Mil.
Gross Profit was 187.567 + 225.814 + 222.9 + 201.78 = $838 Mil.
Total Current Assets was $439 Mil.
Total Assets was $1,558 Mil.
Property, Plant and Equipment(Net PPE) was $77 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $502 Mil.
Total Current Liabilities was $378 Mil.
Long-Term Debt was $2,340 Mil.
Net Income was 37.892 + 54.002 + 21.531 + 30.798 = $144 Mil.
Non Operating Income was -1.52 + -0.889 + 10.27 + 0.203 = $8 Mil.
Cash Flow from Operations was 75.792 + 64.649 + 80.85 + 22.079 = $243 Mil.
Accounts Receivable was $34 Mil.
Revenue was 396.334 + 470.888 + 490.79 + 420.535 = $1,779 Mil.
Gross Profit was 231.98 + 283.715 + 283.637 + 256.096 = $1,055 Mil.
Total Current Assets was $304 Mil.
Total Assets was $1,408 Mil.
Property, Plant and Equipment(Net PPE) was $89 Mil.
Depreciation, Depletion and Amortization(DDA) was $43 Mil.
Selling, General & Admin. Expense(SGA) was $551 Mil.
Total Current Liabilities was $384 Mil.
Long-Term Debt was $2,370 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)
=(32.05 / 1518.2) / (34.312 / 1778.547)
=0.02111053 / 0.01929215
=1.0943

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)
=(225.814 / 1778.547) / (187.567 / 1518.2)
=0.59342148 / 0.55200962
=1.075

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 - (438.987 + 76.814) / 1558.33) / (1 - (304.412 + 89.353) / 1408.236)
=0.669004 / 0.72038423
=0.9287

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
=1518.2 / 1778.547
=0.8536

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))
=(43.074 / (43.074 + 89.353)) / (48.077 / (48.077 + 76.814))
=0.325266 / 0.38495168
=0.845

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)
=(501.908 / 1518.2) / (551.274 / 1778.547)
=0.33059412 / 0.30995751
=1.0666

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)
=((2340 + 378.358) / 1558.33) / ((2370 + 384.178) / 1408.236)
=1.74440459 / 1.95576452
=0.8919

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
=(144.223 - 8.064 - 243.37) / 1558.33
=-0.0688

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.

Weight Watchers International Inc has a M-score of -2.83 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.

Weight Watchers International Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.08151.14631.34240.88320.85341.14931.06310.75660.89161.035
GMI 1.01660.9580.99910.98821.02041.04470.95570.94590.9681.0241
AQI 0.99250.99740.99070.96470.97061.02651.01820.96840.98720.9369
SGI 1.08581.12331.07131.18961.04680.91091.0381.25281.01110.9373
DEPI 0.84580.92991.22590.91220.89870.90640.90111.12541.27250.9932
SGAI 1.13931.25940.84251.0741.03510.99451.03860.99861.15130.9888
LVGI 0.99251.43250.981.76120.95460.91180.95810.81061.77440.8536
TATA -0.0925-0.1439-0.0559-0.1123-0.0351-0.0813-0.0792-0.0861-0.0623-0.0685
M-score -2.79-3.13-2.31-3.24-2.74-2.75-2.78-2.85-3.13-2.79

Weight Watchers International Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87671.02910.89160.95820.88870.85781.0351.06271.13991.0943
GMI 0.96020.97440.9680.97020.97820.98451.02411.04151.05881.075
AQI 0.94170.95530.98720.96090.99220.94750.93690.9530.92530.9287
SGI 1.08421.02571.01111.00410.99720.97710.93730.89930.86570.8536
DEPI 1.00891.71171.27251.35281.47481.10360.99320.90570.8610.845
SGAI 1.09771.1231.15131.06791.04041.01080.98881.0231.04431.0666
LVGI 1.70341.73121.77440.85470.86740.8430.85360.87660.86470.8919
TATA -0.0376-0.0422-0.0623-0.0698-0.0568-0.0663-0.0685-0.0681-0.088-0.0688
M-score -2.98-2.84-3.13-2.80-2.77-2.91-2.79-2.80-2.86-2.83
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