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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

WTW' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -1.92
Current: -2.85

-3.28
-1.92

During the past 13 years, the highest Beneish M-Score of Weight Watchers International Inc was -1.92. The lowest was -3.28. And the median was -2.84.


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 * 1.1251+0.528 * 1.0511+0.404 * 0.9253+0.892 * 0.8771+0.115 * 1.0858
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0695+4.679 * -0.088-0.327 * 0.8647
=-2.85

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $37 Mil.
Revenue was 397.547 + 409.358 + 378.168 + 393.898 = $1,579 Mil.
Gross Profit was 225.814 + 222.9 + 212.759 + 229.959 = $891 Mil.
Total Current Assets was $400 Mil.
Total Assets was $1,526 Mil.
Property, Plant and Equipment(Net PPE) was $81 Mil.
Depreciation, Depletion and Amortization(DDA) was $47 Mil.
Selling, General & Admin. Expense(SGA) was $522 Mil.
Total Current Liabilities was $386 Mil.
Long-Term Debt was $2,346 Mil.
Net Income was 54.002 + 21.531 + 30.798 + 60.258 = $167 Mil.
Non Operating Income was -0.889 + 10.27 + 0.203 + 0.352 = $10 Mil.
Cash Flow from Operations was 64.649 + 80.85 + 22.079 + 123.424 = $291 Mil.
Accounts Receivable was $38 Mil.
Revenue was 470.888 + 490.79 + 407.915 + 430.61 = $1,800 Mil.
Gross Profit was 283.715 + 283.637 + 245.064 + 255.833 = $1,068 Mil.
Total Current Assets was $252 Mil.
Total Assets was $1,311 Mil.
Property, Plant and Equipment(Net PPE) was $88 Mil.
Depreciation, Depletion and Amortization(DDA) was $58 Mil.
Selling, General & Admin. Expense(SGA) was $557 Mil.
Total Current Liabilities was $337 Mil.
Long-Term Debt was $2,376 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)
=(37.29 / 1578.971) / (37.787 / 1800.203)
=0.02361665 / 0.02099041
=1.1251

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)
=(222.9 / 1800.203) / (225.814 / 1578.971)
=0.59340474 / 0.56456515
=1.0511

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 - (399.551 + 81.092) / 1526.364) / (1 - (252.412 + 87.868) / 1310.819)
=0.68510591 / 0.74040657
=0.9253

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
=1578.971 / 1800.203
=0.8771

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))
=(58.167 / (58.167 + 87.868)) / (46.982 / (46.982 + 81.092))
=0.39830862 / 0.3668348
=1.0858

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)
=(522.153 / 1578.971) / (556.631 / 1800.203)
=0.33069195 / 0.30920457
=1.0695

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)
=((2346 + 385.729) / 1526.364) / ((2376 + 337.121) / 1310.819)
=1.78969695 / 2.06979072
=0.8647

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
=(166.589 - 9.936 - 291.002) / 1526.364
=-0.088

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 -2.85 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 1.08151.14631.34240.88320.85341.14931.06310.86120.78871.0279
GMI 1.01660.9580.99910.98821.02041.04470.95570.94590.97111.0208
AQI 0.99260.99740.99070.96470.97061.02651.01820.96840.98720.9369
SGI 1.08581.12331.07131.18961.04680.91091.0381.25281.00420.9438
DEPI 0.84450.92991.22590.91220.86860.93780.90111.12541.27250.9932
SGAI 1.13931.25940.84251.0741.03510.99451.03860.99861.13731.001
LVGI 0.99151.43250.981.76120.95460.91180.95810.81061.77440.8536
TATA -0.0925-0.1439-0.0559-0.1123-0.0351-0.0813-0.079-0.0835-0.0728-0.0685
M-score -2.79-3.13-2.31-3.24-2.74-2.75-2.78-2.74-3.28-2.79

Weight Watchers International Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.81040.87671.02910.78870.96480.89490.86511.02221.04931.1251
GMI 0.95080.96020.97440.97110.97340.98140.98841.01741.03431.0511
AQI 0.98080.94170.95530.98720.96090.99220.94750.93690.9530.9253
SGI 1.16061.08421.02571.00420.99710.99020.96890.94910.91080.8771
DEPI 1.32631.31490.98031.27251.02220.89731.47850.99321.03481.0858
SGAI 1.08651.09771.1231.13731.05481.02730.99531.01191.0471.0695
LVGI 1.66721.70341.73121.77440.85470.86740.8430.85360.87660.8647
TATA -0.0323-0.0357-0.0483-0.0728-0.0749-0.066-0.068-0.0685-0.0681-0.088
M-score -2.89-2.94-2.95-3.28-2.85-2.88-2.87-2.80-2.80-2.85
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