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The Western Union Co (NYSE:WU)
Beneish M-Score
-2.46 (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.

The Western Union Co has a M-score of -2.46 suggests that the company is not a manipulator.

WU' s Beneish M-Score Range Over the Past 10 Years
Min: -5.25   Max: 62.73
Current: -2.46

-5.25
62.73

During the past 13 years, the highest Beneish M-Score of The Western Union Co was 62.73. The lowest was -5.25. And the median was -2.60.


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 The 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 * 1.1188+0.528 * 1.0206+0.404 * 1.0513+0.892 * 0.9815+0.115 * 1.0237
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9504+4.679 * -0.0266-0.327 * 0.9793
=-2.46

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,164 Mil.
Revenue was 1375.7 + 1297.7 + 1380 + 1399.2 = $5,453 Mil.
Gross Profit was 553.8 + 518.3 + 569 + 582 = $2,223 Mil.
Total Current Assets was $4,520 Mil.
Total Assets was $9,395 Mil.
Property, Plant and Equipment(Net PPE) was $222 Mil.
Depreciation, Depletion and Amortization(DDA) was $275 Mil.
Selling, General & Admin. Expense(SGA) was $1,118 Mil.
Total Current Liabilities was $4,351 Mil.
Long-Term Debt was $3,229 Mil.
Net Income was 205.6 + 185.7 + 212.3 + 232.3 = $836 Mil.
Non Operating Income was 2.5 + -1.5 + -6.6 + 0.1 = $-6 Mil.
Cash Flow from Operations was 272.9 + 212.7 + 266.9 + 338.5 = $1,091 Mil.
Accounts Receivable was $1,060 Mil.
Revenue was 1383.6 + 1320.9 + 1409.9 + 1440.9 = $5,555 Mil.
Gross Profit was 584.2 + 549.1 + 578 + 600.4 = $2,312 Mil.
Total Current Assets was $5,121 Mil.
Total Assets was $10,064 Mil.
Property, Plant and Equipment(Net PPE) was $201 Mil.
Depreciation, Depletion and Amortization(DDA) was $263 Mil.
Selling, General & Admin. Expense(SGA) was $1,198 Mil.
Total Current Liabilities was $4,565 Mil.
Long-Term Debt was $3,726 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)
=(1163.5 / 5452.6) / (1059.5 / 5555.3)
=0.21338444 / 0.19071877
=1.1188

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)
=(2311.7 / 5555.3) / (2223.1 / 5452.6)
=0.41612514 / 0.40771375
=1.0206

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 - (4519.7 + 221.7) / 9394.9) / (1 - (5120.9 + 201.2) / 10063.8)
=0.49532193 / 0.47116397
=1.0513

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
=5452.6 / 5555.3
=0.9815

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))
=(263.1 / (263.1 + 201.2)) / (274.9 / (274.9 + 221.7))
=0.56665949 / 0.55356424
=1.0237

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)
=(1117.9 / 5452.6) / (1198.4 / 5555.3)
=0.20502146 / 0.21572192
=0.9504

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)
=((3228.5 + 4350.8) / 9394.9) / ((3725.8 + 4565.1) / 10063.8)
=0.80674621 / 0.82383394
=0.9793

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
=(835.9 - -5.5 - 1091) / 9394.9
=-0.0266

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.

The Western Union Co has a M-score of -2.46 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.

The Western Union Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.10280.01950.6351.116571.72210.014464.29771.01421.087
GMI 1.06891.03010.95391.01890.980.99771.04771.01050.9889
AQI 0.92370.99690.91170.89961.40430.93570.99211.02761.0491
SGI 1.09621.07790.96241.02151.05751.03160.97831.01180.978
DEPI 0.96860.89250.99550.91060.95820.88581.0010.9781.0562
SGAI 0.96421.00511.15360.96651.03891.10081.0750.96341.0274
LVGI 0.93291.00380.95710.97681.01551.00290.97910.9580.9836
TATA -0.0443-0.0618-0.0499-0.0122-0.0084-0.0182-0.0292-0.0188-0.0235
M-score -2.48-3.60-3.16-2.4462.73-3.5055.61-2.51-2.51

The Western Union Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1011.01421111.0871.14951.1188
GMI 1.05181.03791.02661.01050.99710.98850.98750.98891.00161.0206
AQI 0.95880.95610.99331.02761.04881.04371.06971.04911.05081.0513
SGI 0.99471.00531.01341.01181.00180.99430.98120.9780.97910.9815
DEPI 0.99480.98250.98170.9780.9740.99431.03441.05621.04451.0237
SGAI 1.07661.05251.00520.96340.9590.99261.0061.02741.01550.9504
LVGI 0.97940.98750.98060.9580.93820.96590.97180.98361.01230.9793
TATA -0.0263-0.0274-0.0246-0.0188-0.0194-0.0207-0.0228-0.0235-0.0256-0.0266
M-score -2.60-3.53-2.57-2.51-2.53-2.56-2.57-2.51-2.46-2.46
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