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Weight Watchers International Inc (NYSE:WTW)
Beneish M-Score
-2.84 (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 -2.84 suggests that the company is not a manipulator.

WTW' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -1.89
Current: -2.84

-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 -2.86.


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 * 0.9187+0.528 * 1.0943+0.404 * 1.1136+0.892 * 0.8315+0.115 * 0.858
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0442+4.679 * -0.0419-0.327 * 1.0372
=-2.84

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $28 Mil.
Revenue was 309.754 + 322.103 + 327.827 + 345.184 = $1,305 Mil.
Gross Profit was 159.364 + 157.303 + 166.27 + 187.567 = $671 Mil.
Total Current Assets was $251 Mil.
Total Assets was $1,341 Mil.
Property, Plant and Equipment(Net PPE) was $67 Mil.
Depreciation, Depletion and Amortization(DDA) was $54 Mil.
Selling, General & Admin. Expense(SGA) was $448 Mil.
Total Current Liabilities was $458 Mil.
Long-Term Debt was $2,032 Mil.
Net Income was 27.877 + -5.433 + 4.362 + 37.892 = $65 Mil.
Non Operating Income was 6.356 + 4.201 + -0.527 + -1.52 = $9 Mil.
Cash Flow from Operations was 33.727 + -7.433 + 10.328 + 75.792 = $112 Mil.
Accounts Receivable was $37 Mil.
Revenue was 397.547 + 409.358 + 366.111 + 396.334 = $1,569 Mil.
Gross Profit was 225.814 + 222.9 + 201.78 + 231.98 = $882 Mil.
Total Current Assets was $400 Mil.
Total Assets was $1,526 Mil.
Property, Plant and Equipment(Net PPE) was $81 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General & Admin. Expense(SGA) was $516 Mil.
Total Current Liabilities was $386 Mil.
Long-Term Debt was $2,346 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)
=(28.486 / 1304.868) / (37.29 / 1569.35)
=0.02183056 / 0.02376143
=0.9187

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)
=(157.303 / 1569.35) / (159.364 / 1304.868)
=0.56231816 / 0.51384814
=1.0943

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 - (250.575 + 67.394) / 1341.177) / (1 - (399.551 + 81.092) / 1526.364)
=0.76291794 / 0.68510591
=1.1136

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
=1304.868 / 1569.35
=0.8315

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))
=(49.987 / (49.987 + 81.092)) / (53.92 / (53.92 + 67.394))
=0.38135018 / 0.44446643
=0.858

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)
=(448.183 / 1304.868) / (516.2 / 1569.35)
=0.34346999 / 0.32892599
=1.0442

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)
=((2031.75 + 457.777) / 1341.177) / ((2346 + 385.729) / 1526.364)
=1.85622554 / 1.78969695
=1.0372

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
=(64.698 - 8.51 - 112.414) / 1341.177
=-0.0419

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 -2.84 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 -0.1439-0.0559-0.1123-0.0351-0.0813-0.0792-0.0861-0.0623-0.0701-0.0914
M-score -3.13-2.31-3.24-2.74-2.75-2.78-2.85-3.13-2.80-2.99

Weight Watchers International Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.95820.88870.85781.0351.06271.13991.09431.02720.91040.9187
GMI 0.97020.97820.98451.02411.04151.05881.0751.07071.08181.0943
AQI 0.96090.99220.94750.93610.9530.92530.92870.94461.02361.1136
SGI 1.00410.99720.97710.93730.89930.86570.85360.85840.84780.8315
DEPI 0.44540.760.92230.95210.86970.82820.81440.89320.87960.858
SGAI 1.06791.04041.01080.99431.02881.05041.0731.0791.03831.0442
LVGI 0.85470.86740.8430.85550.87660.86470.89190.91790.98511.0372
TATA -0.0698-0.0568-0.0663-0.0701-0.0694-0.0893-0.0701-0.079-0.0372-0.0419
M-score -2.90-2.86-2.93-2.80-2.81-2.87-2.84-2.93-2.84-2.84
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