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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

WTW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -1.89
Current: -2.73

-3.27
-1.89

During the past 13 years, the highest Beneish M-Score of Weight Watchers International Inc was -1.89. The lowest was -3.27. 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 * 0.9683+0.528 * 1.0094+0.404 * 1.0882+0.892 * 0.9381+0.115 * 0.9281
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0156+4.679 * -0.0409-0.327 * 1.0001
=-2.73

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $26 Mil.
Revenue was 280.819 + 309.761 + 306.91 + 259.238 = $1,157 Mil.
Gross Profit was 144.303 + 161.048 + 149.673 + 120.798 = $576 Mil.
Total Current Assets was $215 Mil.
Total Assets was $1,261 Mil.
Property, Plant and Equipment(Net PPE) was $52 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $405 Mil.
Total Current Liabilities was $314 Mil.
Long-Term Debt was $1,985 Mil.
Net Income was 34.658 + 30.494 + -10.753 + -11.289 = $43 Mil.
Non Operating Income was 0.146 + -0.607 + 0.065 + -0.735 = $-1 Mil.
Cash Flow from Operations was 47.551 + 3.033 + 43.333 + 1.947 = $96 Mil.
Accounts Receivable was $28 Mil.
Revenue was 273.324 + 309.754 + 322.103 + 327.827 = $1,233 Mil.
Gross Profit was 136.622 + 159.364 + 157.303 + 166.27 = $620 Mil.
Total Current Assets was $322 Mil.
Total Assets was $1,395 Mil.
Property, Plant and Equipment(Net PPE) was $62 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $426 Mil.
Total Current Liabilities was $516 Mil.
Long-Term Debt was $2,027 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)
=(25.867 / 1156.728) / (28.475 / 1233.008)
=0.02236221 / 0.02309393
=0.9683

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)
=(619.559 / 1233.008) / (575.822 / 1156.728)
=0.50247768 / 0.49780242
=1.0094

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 - (215.082 + 51.771) / 1261.418) / (1 - (322.089 + 62.229) / 1395.152)
=0.78844998 / 0.72453324
=1.0882

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
=1156.728 / 1233.008
=0.9381

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))
=(53.691 / (53.691 + 62.229)) / (51.571 / (51.571 + 51.771))
=0.46317288 / 0.49903234
=0.9281

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)
=(405.416 / 1156.728) / (425.524 / 1233.008)
=0.35048516 / 0.34511049
=1.0156

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)
=((1985.092 + 313.693) / 1261.418) / ((2026.5 + 515.727) / 1395.152)
=1.82238164 / 1.8221864
=1.0001

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
=(43.11 - -1.131 - 95.864) / 1261.418
=-0.0409

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 -2.73 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 local exchange's currency.

Weight Watchers International Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.34240.88320.85341.14931.06310.75110.89811.0351.02721.1644
GMI 0.99910.98821.02041.04470.95570.94260.97141.02411.07071.0999
AQI 0.99070.96470.97061.02651.01820.96840.98720.93610.94461.0478
SGI 1.07131.18961.04680.91091.0381.2621.00380.93730.85840.7868
DEPI 1.22590.91220.89870.90640.90111.12541.27250.95210.89320.8323
SGAI 0.84251.0741.03510.99451.03861.01391.1340.99431.0791.0254
LVGI 0.981.76120.95460.91180.95810.81061.77440.85550.91791.0156
TATA -0.0559-0.1123-0.0351-0.0813-0.0792-0.0881-0.0623-0.0701-0.079-0.0224
M-score -2.31-3.24-2.74-2.75-2.78-2.86-3.13-2.80-2.93-2.58

Weight Watchers International Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.13991.09431.02720.91040.91871.0941.16441.07491.14910.9683
GMI 1.05881.0751.07071.08181.09431.09861.09991.07361.03941.0094
AQI 0.92530.92870.94461.02361.11361.0831.04781.08261.03321.0882
SGI 0.86570.85360.85840.84780.83150.81220.78680.82520.88070.9381
DEPI 0.82820.81440.89320.87960.8580.86230.83230.86040.89950.9281
SGAI 1.05041.0731.0791.03831.04421.03771.02541.03731.0171.0156
LVGI 0.86470.89190.91790.98511.03721.04461.01561.02091.00071.0001
TATA -0.0893-0.0701-0.079-0.0372-0.0419-0.0174-0.0224-0.0645-0.0339-0.0409
M-score -2.87-2.84-2.93-2.84-2.84-2.59-2.58-2.83-2.59-2.73
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