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Western Union Co (NYSE:WU)
Beneish M-Score
-2.56 (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 -2.56 suggests that the company is not a manipulator.

WU' s 10-Year Beneish M-Score Range
Min: -5.25   Max: 62.73
Current: -2.56

-5.25
62.73

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.


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+0.528 * 0.9885+0.404 * 1.0437+0.892 * 0.9943+0.115 * 0.9943
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9926+4.679 * -0.0207-0.327 * 0.9659
=-2.56

* 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 $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.
Net Income was 189.3 + 203.9 + 221.5 + 234.1 = $849 Mil.
Non Operating Income was -3.3 + -0.8 + 0.1 + 0.1 = $-4 Mil.
Cash Flow from Operations was 253.9 + 211.8 + 270.6 + 325.2 = $1,062 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1405.6 + 1350.8 + 1421.9 + 1408.8 = $5,587 Mil.
Gross Profit was 577.8 + 553.6 + 576.2 + 590.6 = $2,298 Mil.
Total Current Assets was $5,208 Mil.
Total Assets was $9,875 Mil.
Property, Plant and Equipment(Net PPE) was $209 Mil.
Depreciation, Depletion and Amortization(DDA) was $269 Mil.
Selling, General & Admin. Expense(SGA) was $1,214 Mil.
Total Current Liabilities was $4,704 Mil.
Long-Term Debt was $3,719 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)
=(1059.5 / 5555.3) / (0 / 5587.1)
=0.19071877 / 0
=1

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)
=(549.1 / 5587.1) / (584.2 / 5555.3)
=0.41134041 / 0.41612514
=0.9885

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 - (5120.9 + 201.2) / 10063.8) / (1 - (5208.4 + 208.5) / 9874.6)
=0.47116397 / 0.45143094
=1.0437

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
=5555.3 / 5587.1
=0.9943

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))
=(269.1 / (269.1 + 208.5)) / (263.1 / (263.1 + 201.2))
=0.56344221 / 0.56665949
=0.9943

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)
=(1198.4 / 5555.3) / (1214.2 / 5587.1)
=0.21572192 / 0.21732205
=0.9926

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)
=((3725.8 + 4565.1) / 10063.8) / ((3719.1 + 4703.5) / 9874.6)
=0.82383394 / 0.85295607
=0.9659

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
=(848.8 - -3.9 - 1061.5) / 10063.8
=-0.0207

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 -2.56 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

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 01.0989064.29771011.014211
GMI 1.01391.02931.04631.04771.05181.03791.02661.01050.99710.9885
AQI 0.98390.96980.98020.99210.95880.95610.99331.02761.04881.0437
SGI 0.99910.98180.97770.97830.99471.00531.01341.01181.00180.9943
DEPI 0.93970.96290.98971.0010.99480.98250.98170.9780.9740.9943
SGAI 1.07111.07431.10031.0751.07661.05251.00520.96340.9590.9926
LVGI 1.05721.00841.00830.97910.97940.98750.98060.9580.93820.9659
TATA -0.0247-0.0321-0.0283-0.0292-0.0263-0.0274-0.0246-0.0188-0.0194-0.0207
M-score -3.55-2.57-3.5655.61-2.60-3.53-2.57-2.51-2.53-2.56
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