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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-2.59 (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 -2.59 suggests that the company is not a manipulator.

WTW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28   Max: -1.89
Current: -2.59

-3.28
-1.89

During the past 13 years, the highest Beneish M-Score of Weight Watchers International Inc was -1.89. The lowest was -3.28. And the median was -2.85.


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 * 1.094+0.528 * 1.0986+0.404 * 1.083+0.892 * 0.8122+0.115 * 0.8623
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0377+4.679 * -0.0174-0.327 * 1.0446
=-2.59

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 21.79 + 27.877 + -5.433 + 4.362 = $49 Mil.
Non Operating Income was -0.423 + 6.356 + 4.201 + -0.527 = $10 Mil.
Cash Flow from Operations was 26.574 + 33.727 + -7.433 + 10.328 = $63 Mil.
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 $51 Mil.
Selling, General & Admin. Expense(SGA) was $505 Mil.
Total Current Liabilities was $378 Mil.
Long-Term Debt was $2,340 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)
=(28.475 / 1233.008) / (32.05 / 1518.2)
=0.02309393 / 0.02111053
=1.094

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)
=(159.364 / 1518.2) / (136.622 / 1233.008)
=0.55200962 / 0.50247768
=1.0986

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 - (322.089 + 62.229) / 1395.152) / (1 - (438.987 + 76.814) / 1558.33)
=0.72453324 / 0.669004
=1.083

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
=1233.008 / 1518.2
=0.8122

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))
=(51.082 / (51.082 + 76.814)) / (53.691 / (53.691 + 62.229))
=0.39940264 / 0.46317288
=0.8623

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)
=(425.524 / 1233.008) / (504.913 / 1518.2)
=0.34511049 / 0.33257344
=1.0377

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)
=((2026.5 + 515.727) / 1395.152) / ((2340 + 378.358) / 1558.33)
=1.8221864 / 1.74440459
=1.0446

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
=(48.596 - 9.607 - 63.196) / 1395.152
=-0.0174

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 -2.59 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.14631.34240.88320.85341.14931.06310.75660.89161.0351.0272
GMI 0.9580.99910.98821.02041.04470.95570.94590.9681.02411.0707
AQI 0.99740.99070.96470.97061.02651.01820.96840.98720.93610.9446
SGI 1.12331.07131.18961.04680.91091.0381.25281.01110.93730.8584
DEPI 0.92991.22590.91220.89870.90640.90111.12541.27250.95210.8932
SGAI 1.25940.84251.0741.03510.99451.03860.99861.15130.99431.079
LVGI 1.43250.981.76120.95460.91180.95810.81061.77440.85550.9179
TATA -0.1439-0.0559-0.1123-0.0351-0.0813-0.0792-0.0861-0.0623-0.0701-0.079
M-score -3.13-2.31-3.24-2.74-2.75-2.78-2.85-3.13-2.80-2.93

Weight Watchers International Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.88870.85781.0351.06271.13991.09431.02720.91040.91871.094
GMI 0.97820.98451.02411.04151.05881.0751.07071.08181.09431.0986
AQI 0.99220.94750.93610.9530.92530.92870.94461.02361.11361.083
SGI 0.99720.97710.93730.89930.86570.85360.85840.84780.83150.8122
DEPI 0.760.92230.95210.86970.82820.81440.89320.87960.8580.8623
SGAI 1.04041.01080.99431.02881.05041.0731.0791.03831.04421.0377
LVGI 0.86740.8430.85550.87660.86470.89190.91790.98511.03721.0446
TATA -0.0568-0.0663-0.0701-0.0694-0.0893-0.0701-0.079-0.0372-0.0419-0.0174
M-score -2.86-2.93-2.80-2.81-2.87-2.84-2.93-2.84-2.84-2.59
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