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Western Union Co (NYSE:WU)
Beneish M-Score
-2.51 (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.

Western Union Co has a M-score of -2.51 suggests that the company is not a manipulator.

WU' s 10-Year Beneish M-Score Range
Min: -3.6   Max: 62.73
Current: -2.51

-3.6
62.73

During the past 13 years, the highest Beneish M-Score of Western Union Co was 62.73. The lowest was -3.60. And the median was -2.50.


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 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 * 1.0142+0.528 * 1.0105+0.404 * 1.0276+0.892 * 1.0118+0.115 * 0.978
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9634+4.679 * -0.0188-0.327 * 0.958
=-2.51

* 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 $1,007 Mil.
Revenue was 1409.9 + 1440.9 + 1405.6 + 1350.8 = $5,607 Mil.
Gross Profit was 578 + 600.4 + 577.8 + 553.6 = $2,310 Mil.
Total Current Assets was $5,097 Mil.
Total Assets was $9,890 Mil.
Property, Plant and Equipment(Net PPE) was $206 Mil.
Depreciation, Depletion and Amortization(DDA) was $272 Mil.
Selling, General & Admin. Expense(SGA) was $1,169 Mil.
Total Current Liabilities was $4,885 Mil.
Long-Term Debt was $3,220 Mil.
Net Income was 221.5 + 234.1 + 193.8 + 203 = $852 Mil.
Non Operating Income was 0.1 + 0.1 + -5.7 + -1.7 = $-7 Mil.
Cash Flow from Operations was 270.6 + 325.2 + 253.3 + 196.8 = $1,046 Mil.
Accounts Receivable was $981 Mil.
Revenue was 1421.9 + 1408.8 + 1385.9 + 1325.4 = $5,542 Mil.
Gross Profit was 576.2 + 590.6 + 574.2 + 566 = $2,307 Mil.
Total Current Assets was $5,344 Mil.
Total Assets was $10,121 Mil.
Property, Plant and Equipment(Net PPE) was $210 Mil.
Depreciation, Depletion and Amortization(DDA) was $263 Mil.
Selling, General & Admin. Expense(SGA) was $1,200 Mil.
Total Current Liabilities was $5,445 Mil.
Long-Term Debt was $3,213 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)
=(1006.9 / 5607.2) / (981.3 / 5542)
=0.17957269 / 0.17706604
=1.0142

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)
=(600.4 / 5542) / (578 / 5607.2)
=0.41627571 / 0.41193466
=1.0105

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 - (5096.9 + 206.4) / 9890.4) / (1 - (5343.5 + 209.9) / 10121.3)
=0.46379317 / 0.45131554
=1.0276

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
=5607.2 / 5542
=1.0118

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))
=(262.8 / (262.8 + 209.9)) / (271.9 / (271.9 + 206.4))
=0.55595515 / 0.56847167
=0.978

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)
=(1169.3 / 5607.2) / (1199.6 / 5542)
=0.20853545 / 0.21645615
=0.9634

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)
=((3220.4 + 4885.4) / 9890.4) / ((3213 + 5445.4) / 10121.3)
=0.8195624 / 0.85546323
=0.958

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
=(852.4 - -7.2 - 1045.9) / 9890.4
=-0.0188

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 -2.51 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.

Western Union Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.75181.10280.01950.6351.116571.72210.014464.29771.0142
GMI 1.02711.06891.03010.95391.01890.980.99771.04771.0105
AQI 0.98280.92370.99690.91170.89961.40430.93570.99211.0276
SGI 1.12091.09621.07790.96241.02151.05751.03160.97831.0118
DEPI 1.32650.96860.89250.99550.91060.95820.88581.0010.978
SGAI 1.08320.96421.00511.15360.96651.03891.10081.0750.9634
LVGI 3.2150.93291.00380.95710.97681.01551.00290.97910.958
TATA -0.0369-0.0443-0.0618-0.0499-0.0122-0.0084-0.0182-0.0292-0.0188
M-score -3.47-2.48-3.60-3.16-2.4462.73-3.5055.61-2.51

Western Union Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 10.014401.0989064.29771011.0142
GMI 0.97240.99771.01391.02931.04631.04771.05181.03791.02661.0105
AQI 1.29670.93570.98390.96980.98020.99210.95880.95610.99331.0276
SGI 1.04691.03160.99910.98180.97770.97830.99471.00531.01341.0118
DEPI 0.88430.88580.93970.96290.98971.0010.99480.98250.98170.978
SGAI 1.07711.10081.07111.07431.10031.0751.07661.05251.00520.9634
LVGI 0.96241.00291.05721.00841.00830.97910.97940.98750.98060.958
TATA 0.0041-0.0182-0.0247-0.0321-0.0283-0.0292-0.0263-0.0274-0.0246-0.0188
M-score -2.33-3.50-3.55-2.57-3.5655.61-2.60-3.53-2.57-2.51
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