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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-3.01 (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 -3.01 suggests that the company is not a manipulator.

WTW' s 10-Year Beneish M-Score Range
Min: -3.24   Max: -1.97
Current: -3.01

-3.24
-1.97

During the past 13 years, the highest Beneish M-Score of Weight Watchers International Inc was -1.97. 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 * 1.0272+0.528 * 1.0707+0.404 * 0.936+0.892 * 0.8584+0.115 * 0.8563
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0873+4.679 * -0.0926-0.327 * 0.9324
=-3.01

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
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 $428 Mil.
Total Assets was $1,515 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 $377 Mil.
Long-Term Debt was $2,334 Mil.
Net Income was -14.778 + 37.892 + 54.002 + 21.531 = $99 Mil.
Non Operating Income was -0.527 + -1.52 + -0.889 + 10.27 = $7 Mil.
Cash Flow from Operations was 10.328 + 75.792 + 64.649 + 80.85 = $232 Mil.
Accounts Receivable was $36 Mil.
Revenue was 366.111 + 396.334 + 470.888 + 490.79 = $1,724 Mil.
Gross Profit was 201.78 + 231.98 + 283.715 + 283.637 = $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 $539 Mil.
Total Current Liabilities was $346 Mil.
Long-Term Debt was $2,358 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)
=(31.96 / 1479.916) / (36.248 / 1724.123)
=0.02159582 / 0.02102402
=1.0272

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)
=(187.567 / 1724.123) / (166.27 / 1479.916)
=0.58064999 / 0.54229497
=1.0707

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 - (427.728 + 74.65) / 1515.187) / (1 - (315.725 + 87.052) / 1408.931)
=0.66843829 / 0.71412582
=0.936

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
=1479.916 / 1724.123
=0.8584

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))
=(44.904 / (44.904 + 87.052)) / (49.234 / (49.234 + 74.65))
=0.34029525 / 0.39742017
=0.8563

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)
=(503.237 / 1479.916) / (539.189 / 1724.123)
=0.3400443 / 0.31273233
=1.0873

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)
=((2334 + 377.03) / 1515.187) / ((2358 + 345.82) / 1408.931)
=1.7892379 / 1.91905778
=0.9324

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
=(98.647 - 7.334 - 231.619) / 1515.187
=-0.0926

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 -3.01 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 0.99740.99070.96470.97061.02651.01820.96840.98720.93690.936
SGI 1.12331.07131.18961.04680.91091.0381.25281.01110.93730.8584
DEPI 0.92991.22590.91220.89870.90640.90111.12541.27250.99320.8563
SGAI 1.25940.84251.0741.03510.99451.03860.99861.15130.98671.0873
LVGI 1.43250.981.76120.95460.91180.95810.81061.77440.85360.9324
TATA -0.1439-0.0559-0.1123-0.0351-0.0813-0.0792-0.0861-0.0623-0.0685-0.0926
M-score -3.13-2.31-3.24-2.74-2.75-2.78-2.85-3.13-2.79-3.01

Weight Watchers International Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.02910.89160.95820.88870.85781.0351.06271.13991.09431.0272
GMI 0.97440.9680.97020.97820.98451.02411.04151.05881.0751.0707
AQI 0.95530.98720.96090.99220.94750.93690.9530.92530.92870.936
SGI 1.02571.01111.00410.99720.97710.93730.89930.86570.85360.8584
DEPI 1.71171.27251.35281.47481.10360.99320.90570.8610.8450.8563
SGAI 1.1231.15131.06791.04041.01080.98671.02081.04191.06411.0873
LVGI 1.73121.77440.85470.86740.8430.85360.87660.86470.89190.9324
TATA -0.0422-0.0623-0.0698-0.0568-0.0663-0.0685-0.0681-0.088-0.0688-0.0926
M-score -2.84-3.13-2.80-2.77-2.91-2.79-2.80-2.86-2.83-3.01
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