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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-2.57 (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 -2.58 suggests that the company is not a manipulator.

WTW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -1.97
Current: -2.57

-3.27
-1.97

During the past 13 years, the highest Beneish M-Score of Weight Watchers International Inc was -1.97. The lowest was -3.27. 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 * 1.1644+0.528 * 1.0999+0.404 * 1.0485+0.892 * 0.7868+0.115 * 0.8323
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0254+4.679 * -0.022-0.327 * 1.0056
=-2.58

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $29 Mil.
Revenue was 259.238 + 273.324 + 309.754 + 322.103 = $1,164 Mil.
Gross Profit was 120.798 + 136.622 + 159.364 + 157.303 = $574 Mil.
Total Current Assets was $359 Mil.
Total Assets was $1,422 Mil.
Property, Plant and Equipment(Net PPE) was $58 Mil.
Depreciation, Depletion and Amortization(DDA) was $53 Mil.
Selling, General & Admin. Expense(SGA) was $406 Mil.
Total Current Liabilities was $503 Mil.
Long-Term Debt was $2,021 Mil.
Net Income was -11.289 + 21.79 + 27.877 + -5.433 = $33 Mil.
Non Operating Income was -0.735 + -0.423 + 6.356 + 4.201 = $9 Mil.
Cash Flow from Operations was 1.947 + 26.574 + 33.727 + -7.433 = $55 Mil.
Accounts Receivable was $32 Mil.
Revenue was 327.827 + 345.184 + 397.547 + 409.358 = $1,480 Mil.
Gross Profit was 166.27 + 187.567 + 225.814 + 222.9 = $803 Mil.
Total Current Assets was $426 Mil.
Total Assets was $1,535 Mil.
Property, Plant and Equipment(Net PPE) was $75 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $503 Mil.
Total Current Liabilities was $432 Mil.
Long-Term Debt was $2,277 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)
=(29.281 / 1164.419) / (31.96 / 1479.916)
=0.02514645 / 0.02159582
=1.1644

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)
=(136.622 / 1479.916) / (120.798 / 1164.419)
=0.54229497 / 0.49302442
=1.0999

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 - (358.973 + 58.186) / 1422.084) / (1 - (425.665 + 74.65) / 1534.64)
=0.70665657 / 0.67398543
=1.0485

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
=1164.419 / 1479.916
=0.7868

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))
=(49.234 / (49.234 + 74.65)) / (53.171 / (53.171 + 58.186))
=0.39742017 / 0.47748233
=0.8323

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)
=(406.029 / 1164.419) / (503.237 / 1479.916)
=0.34869665 / 0.3400443
=1.0254

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)
=((2021.25 + 503.127) / 1422.084) / ((2277.272 + 431.695) / 1534.64)
=1.7751251 / 1.76521334
=1.0056

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
=(32.945 - 9.399 - 54.815) / 1422.084
=-0.022

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 -2.58 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 1.34240.88320.85341.14931.06310.75110.89811.0351.02721.1644
GMI 0.99910.98821.02041.04470.95570.94260.97141.02411.07071.0999
AQI 0.99070.96470.97061.02651.01820.96840.98720.93610.94461.0485
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 0.981.76120.95460.91180.95810.81061.77440.85550.91791.0056
TATA -0.0559-0.1123-0.0351-0.0813-0.0792-0.0881-0.0623-0.0701-0.079-0.022
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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.86411.0351.06271.13991.09431.02720.91040.91871.0941.1644
GMI 0.98781.02411.04151.05881.0751.07071.08181.09431.09861.0999
AQI 0.94750.93610.9530.92530.92870.94461.02361.11361.0831.0485
SGI 0.970.93730.89930.86570.85360.85840.84780.83150.81220.7868
DEPI 0.92230.95210.86970.82820.81440.89320.87960.8580.86230.8323
SGAI 0.99790.99431.02881.05041.0731.0791.03831.04421.03771.0254
LVGI 0.8430.85550.87660.86470.89190.91790.98511.03721.04461.0056
TATA -0.0663-0.0701-0.0694-0.0893-0.0701-0.079-0.0372-0.0419-0.0174-0.022
M-score -2.93-2.80-2.81-2.87-2.84-2.93-2.84-2.84-2.59-2.58
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