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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 Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -1.89
Current: -2.83

-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 * 1.0749+0.528 * 1.0736+0.404 * 1.0826+0.892 * 0.8252+0.115 * 0.8604
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0373+4.679 * -0.0645-0.327 * 1.0209
=-2.83

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $28 Mil.
Revenue was 306.91 + 259.238 + 273.324 + 309.754 = $1,149 Mil.
Gross Profit was 149.673 + 120.798 + 136.622 + 159.364 = $566 Mil.
Total Current Assets was $241 Mil.
Total Assets was $1,290 Mil.
Property, Plant and Equipment(Net PPE) was $55 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $403 Mil.
Total Current Liabilities was $415 Mil.
Long-Term Debt was $1,993 Mil.
Net Income was -10.753 + -11.289 + 21.79 + 27.877 = $28 Mil.
Non Operating Income was 0.065 + -0.735 + -0.423 + 6.356 = $5 Mil.
Cash Flow from Operations was 43.333 + 1.947 + 26.574 + 33.727 = $106 Mil.
Accounts Receivable was $31 Mil.
Revenue was 322.103 + 327.827 + 345.184 + 397.547 = $1,393 Mil.
Gross Profit was 157.303 + 166.27 + 187.567 + 225.814 = $737 Mil.
Total Current Assets was $345 Mil.
Total Assets was $1,446 Mil.
Property, Plant and Equipment(Net PPE) was $72 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $471 Mil.
Total Current Liabilities was $606 Mil.
Long-Term Debt was $2,037 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)
=(27.688 / 1149.226) / (31.215 / 1392.661)
=0.02409274 / 0.02241393
=1.0749

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)
=(736.954 / 1392.661) / (566.457 / 1149.226)
=0.5291697 / 0.49290305
=1.0736

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 - (241.238 + 55.243) / 1290.483) / (1 - (345.232 + 72.106) / 1446.421)
=0.77025579 / 0.71146851
=1.0826

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
=1149.226 / 1392.661
=0.8252

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))
=(51.713 / (51.713 + 72.106)) / (52.107 / (52.107 + 55.243))
=0.41764996 / 0.48539357
=0.8604

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)
=(402.886 / 1149.226) / (470.649 / 1392.661)
=0.3505716 / 0.33794944
=1.0373

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)
=((1992.664 + 414.89) / 1290.483) / ((2037 + 606.163) / 1446.421)
=1.86562241 / 1.82738152
=1.0209

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
=(27.625 - 5.263 - 105.581) / 1290.483
=-0.0645

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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.34240.88320.85341.14931.06310.75660.89771.02791.02721.1644
GMI 0.99910.98821.02041.04470.95570.94590.97111.02081.07071.0999
AQI 0.99070.96470.97061.02651.01820.96840.98720.93610.94461.0485
SGI 1.07131.18961.04680.91091.0381.25281.00420.94380.85840.7868
DEPI 1.22590.91220.86860.93780.90111.12541.27250.99320.85630.8323
SGAI 0.84251.0741.03510.99451.03860.99861.13731.0011.0851.0254
LVGI 0.981.76120.95460.91180.95810.81061.77440.85550.91791.0056
TATA -0.0559-0.1123-0.0351-0.0813-0.079-0.0835-0.0728-0.0686-0.0914-0.022
M-score -2.31-3.24-2.74-2.75-2.78-2.83-3.18-2.79-3.00-2.58

Weight Watchers International Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.0351.06271.13991.09431.02720.91040.91871.0941.16441.0749
GMI 1.02411.04151.05881.0751.07071.08181.09431.09861.09991.0736
AQI 0.93610.9530.92530.92870.94461.02361.11361.0831.04851.0826
SGI 0.93730.89930.86570.85360.85840.84780.83150.81220.78680.8252
DEPI 0.95210.86970.82820.81440.89320.87960.8580.86230.83230.8604
SGAI 0.99431.02881.05041.0731.0791.03831.04421.03771.02541.0373
LVGI 0.85550.87660.86470.89190.91790.98511.03721.04461.00561.0209
TATA -0.0701-0.0694-0.0893-0.0701-0.079-0.0372-0.0419-0.0174-0.022-0.0645
M-score -2.80-2.81-2.87-2.84-2.93-2.84-2.84-2.59-2.58-2.83
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