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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.
During the past 13 years, the highest Beneish M-Score of Western Union Co was 62.73. The lowest was -5.25. And the median was -2.62.
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 Western Union Co 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||+||0.528 * 0.9971||+||0.404 * 1.0488||+||0.892 * 1.0018||+||0.115 * 0.974|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.959||+||4.679 * -0.0194||-||0.327 * 0.9382|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 1320.9 + 1409.9 + 1440.9 + 1405.6 = $5,577 Mil.
Gross Profit was 549.1 + 578 + 600.4 + 577.8 = $2,305 Mil.
Total Current Assets was $5,227 Mil.
Total Assets was $10,353 Mil.
Property, Plant and Equipment(Net PPE) was $203 Mil.
Depreciation, Depletion and Amortization(DDA) was $269 Mil.
Selling, General & Admin. Expense(SGA) was $1,165 Mil.
Total Current Liabilities was $4,556 Mil.
Long-Term Debt was $3,729 Mil.
Net Income was 203.9 + 221.5 + 234.1 + 193.8 = $853 Mil.
Non Operating Income was -0.8 + 0.1 + 0.1 + -5.7 = $-6 Mil.
Cash Flow from Operations was 211.8 + 270.6 + 325.2 + 253.3 = $1,061 Mil.
|Accounts Receivable was $0 Mil.
Revenue was 1350.8 + 1421.9 + 1408.8 + 1385.9 = $5,567 Mil.
Gross Profit was 553.6 + 576.2 + 590.6 + 574.2 = $2,295 Mil.
Total Current Assets was $5,210 Mil.
Total Assets was $9,923 Mil.
Property, Plant and Equipment(Net PPE) was $214 Mil.
Depreciation, Depletion and Amortization(DDA) was $267 Mil.
Selling, General & Admin. Expense(SGA) was $1,212 Mil.
Total Current Liabilities was $4,749 Mil.
Long-Term Debt was $3,714 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0 / 5577.3)||/||(0 / 5567.4)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(578 / 5567.4)||/||(549.1 / 5577.3)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (5227.4 + 202.6) / 10353)||/||(1 - (5209.9 + 214) / 9922.6)|
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.
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))|
|=||(267.1 / (267.1 + 214))||/||(268.6 / (268.6 + 202.6))|
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)|
|=||(1164.5 / 5577.3)||/||(1212.1 / 5567.4)|
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)|
|=||((3728.6 + 4556) / 10353)||/||((3714.1 + 4749.2) / 9922.6)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(853.3 - -6.3||-||1060.9)||/||10353|
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.
Western Union Co has a M-score of -2.53 suggests that the company will not be a manipulator.
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
Western Union Co Annual Data
Western Union Co Quarterly Data