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Weight Watchers International, Inc. (NYSE:WTW)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

WTW' s 10-Year Beneish M-Score Range
Min: -3.24   Max: -1.99
Current: -2.79

-3.24
-1.99

During the past 13 years, the highest Beneish M-Score of Weight Watchers International, Inc. was -1.99. The lowest was -3.24. And the median was -2.79.


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 * 1.035+0.528 * 1.0241+0.404 * 0.9369+0.892 * 0.9373+0.115 * 0.9932
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9888+4.679 * -0.0685-0.327 * 0.8536
=-2.79

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $36 Mil.
Revenue was 378.168 + 393.898 + 465.129 + 486.928 = $1,724 Mil.
Gross Profit was 212.759 + 229.959 + 278.244 + 280.15 = $1,001 Mil.
Total Current Assets was $316 Mil.
Total Assets was $1,409 Mil.
Property, Plant and Equipment(Net PPE) was $87 Mil.
Depreciation, Depletion and Amortization(DDA) was $45 Mil.
Selling, General & Admin. Expense(SGA) was $540 Mil.
Total Current Liabilities was $346 Mil.
Long-Term Debt was $2,358 Mil.
Net Income was 30.798 + 60.258 + 64.916 + 48.753 = $205 Mil.
Non Operating Income was 0.203 + 0.352 + -21.543 + -1.296 = $-22 Mil.
Cash Flow from Operations was 22.079 + 123.424 + 62.85 + 115.163 = $324 Mil.
Accounts Receivable was $37 Mil.
Revenue was 420.535 + 430.61 + 484.752 + 503.535 = $1,839 Mil.
Gross Profit was 256.096 + 255.833 + 293.524 + 288.365 = $1,094 Mil.
Total Current Assets was $218 Mil.
Total Assets was $1,219 Mil.
Property, Plant and Equipment(Net PPE) was $72 Mil.
Depreciation, Depletion and Amortization(DDA) was $37 Mil.
Selling, General & Admin. Expense(SGA) was $583 Mil.
Total Current Liabilities was $448 Mil.
Long-Term Debt was $2,292 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)
=(36.248 / 1724.123) / (37.363 / 1839.432)
=0.02102402 / 0.02031225
=1.035

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)
=(229.959 / 1839.432) / (212.759 / 1724.123)
=0.59464987 / 0.58064999
=1.0241

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 - (315.725 + 87.052) / 1408.931) / (1 - (217.967 + 71.768) / 1218.607)
=0.71412582 / 0.76224082
=0.9369

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
=1724.123 / 1839.432
=0.9373

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))
=(36.64 / (36.64 + 71.768)) / (44.904 / (44.904 + 87.052))
=0.33798244 / 0.34029525
=0.9932

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)
=(540.355 / 1724.123) / (583.013 / 1839.432)
=0.31340861 / 0.31695273
=0.9888

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)
=((2358 + 345.82) / 1408.931) / ((2291.669 + 447.855) / 1218.607)
=1.91905778 / 2.24807834
=0.8536

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
=(204.725 - -22.284 - 323.516) / 1408.931
=-0.0685

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 -2.79 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.84540.75660.81040.87671.02910.89160.96020.89340.86371.035
GMI 0.91430.94590.95080.96020.97440.9680.97130.98110.98811.0241
AQI 1.01820.96840.98080.94170.95530.98720.96090.99220.94750.9369
SGI 1.26161.25281.16061.08421.02571.01111.0020.99190.97050.9373
DEPI 0.76011.12541.14511.00891.71171.27251.35281.47481.10360.9932
SGAI 0.99010.99871.08651.09771.1231.15131.06371.02940.99740.9888
LVGI 0.84420.81061.66721.70341.73121.77440.85470.86740.8430.8536
TATA -0.1212-0.0861-0.0297-0.0376-0.0422-0.0623-0.0698-0.0568-0.0663-0.0685
M-score -2.97-2.85-2.90-2.98-2.84-3.13-2.80-2.77-2.91-2.79
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