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Western Union Co (NYSE:WU)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

WU' s 10-Year Beneish M-Score Range
Min: -5.25   Max: 62.75
Current: -2.57

-5.25
62.75

During the past 13 years, the highest Beneish M-Score of Western Union Co was 62.75. The lowest was -5.25. And the median was -2.65.


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 * 1.0266+0.404 * 0.9933+0.892 * 1.0134+0.115 * 0.9817
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0052+4.679 * -0.0246-0.327 * 0.9806
=-2.57

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $0 Mil.
Revenue was 1440.9 + 1405.6 + 1350.8 + 1421.9 = $5,619 Mil.
Gross Profit was 600.4 + 577.8 + 553.6 + 576.2 = $2,308 Mil.
Total Current Assets was $5,133 Mil.
Total Assets was $9,847 Mil.
Property, Plant and Equipment(Net PPE) was $206 Mil.
Depreciation, Depletion and Amortization(DDA) was $267 Mil.
Selling, General & Admin. Expense(SGA) was $1,205 Mil.
Total Current Liabilities was $4,559 Mil.
Long-Term Debt was $3,714 Mil.
Net Income was 234.1 + 193.8 + 203 + 173.4 = $804 Mil.
Non Operating Income was 0.1 + -5.7 + -1.7 + 0.6 = $-7 Mil.
Cash Flow from Operations was 325.2 + 253.3 + 196.8 + 277.7 = $1,053 Mil.
Accounts Receivable was $0 Mil.
Revenue was 1408.8 + 1385.9 + 1325.4 + 1424.7 = $5,545 Mil.
Gross Profit was 590.6 + 574.2 + 566 + 607.3 = $2,338 Mil.
Total Current Assets was $5,151 Mil.
Total Assets was $9,941 Mil.
Property, Plant and Equipment(Net PPE) was $209 Mil.
Depreciation, Depletion and Amortization(DDA) was $260 Mil.
Selling, General & Admin. Expense(SGA) was $1,183 Mil.
Total Current Liabilities was $5,049 Mil.
Long-Term Debt was $3,469 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)
=(0 / 5619.2) / (0 / 5544.8)
=0 / 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)
=(577.8 / 5544.8) / (600.4 / 5619.2)
=0.42167436 / 0.41073462
=1.0266

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 - (5133.2 + 205.7) / 9846.6) / (1 - (5150.7 + 208.6) / 9940.9)
=0.45779254 / 0.46088382
=0.9933

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
=5619.2 / 5544.8
=1.0134

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))
=(259.9 / (259.9 + 208.6)) / (267.3 / (267.3 + 205.7))
=0.5547492 / 0.56511628
=0.9817

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)
=(1205.2 / 5619.2) / (1183.1 / 5544.8)
=0.21447893 / 0.21337109
=1.0052

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)
=((3714.2 + 4559.4) / 9846.6) / ((3468.7 + 5049.1) / 9940.9)
=0.84024943 / 0.85684395
=0.9806

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
=(804.3 - -6.7 - 1053) / 9846.6
=-0.0246

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 -2.57 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 011.08430.01141.116571.72210.94960.0149
GMI 1.02711.06891.03010.95391.01890.980.99771.0477
AQI 0.98650.92371.22060.74470.89961.40430.95140.9364
SGI 1.12091.09621.07790.96241.02151.05751.03160.9783
DEPI 1.32650.96860.89250.99550.91060.95820.88581.001
SGAI 1.08320.96421.00511.15360.96651.03891.10081.075
LVGI 3.22710.93291.00380.95710.97680.96541.0550.9791
TATA -0.0369-0.0443-0.0618-0.0499-0.0122-0.0084-0.0182-0.0292
M-score -4.16-2.57-2.53-3.80-2.4462.75-2.65-3.55

Western Union Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.899410.949601.098900.0149101
GMI 0.97660.97240.99771.01391.02931.04631.04771.05181.03791.0266
AQI 1.24261.29670.95140.98390.96980.98020.93640.95880.95610.9933
SGI 1.06091.04691.03160.99910.98180.97770.97830.99471.00531.0134
DEPI 0.90130.88430.88580.93970.96290.98971.0010.99480.98250.9817
SGAI 1.07571.07711.10081.07111.07431.10031.0751.07661.05251.0052
LVGI 0.93140.96241.0551.05721.00841.00830.97910.97940.98750.9806
TATA 0.00560.0041-0.0182-0.0247-0.0321-0.0283-0.0292-0.0263-0.0274-0.0246
M-score -2.41-2.33-2.65-3.55-2.57-3.56-3.55-2.60-3.53-2.57
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