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The 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.

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

WU' s Beneish M-Score Range Over the Past 10 Years
Min: -3.6   Max: 62.73
Current: -2.51

-3.6
62.73

During the past 13 years, the highest Beneish M-Score of The Western Union Co was 62.73. The lowest was -3.60. And the median was -2.51.


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 * 1.087+0.528 * 0.9889+0.404 * 1.0491+0.892 * 0.978+0.115 * 1.0562
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0274+4.679 * -0.0235-0.327 * 0.9836
=-2.51

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $1,070 Mil.
Revenue was 1380 + 1399.2 + 1383.6 + 1320.9 = $5,484 Mil.
Gross Profit was 569 + 582 + 584.2 + 549.1 = $2,284 Mil.
Total Current Assets was $4,625 Mil.
Total Assets was $9,459 Mil.
Property, Plant and Equipment(Net PPE) was $232 Mil.
Depreciation, Depletion and Amortization(DDA) was $270 Mil.
Selling, General & Admin. Expense(SGA) was $1,175 Mil.
Total Current Liabilities was $5,399 Mil.
Long-Term Debt was $2,226 Mil.
Net Income was 212.3 + 232.3 + 189.3 + 203.9 = $838 Mil.
Non Operating Income was -6.6 + 0.1 + -3.3 + -0.8 = $-11 Mil.
Cash Flow from Operations was 266.9 + 338.5 + 253.9 + 211.8 = $1,071 Mil.
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 $5,885 Mil.
Long-Term Debt was $2,220 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)
=(1070.4 / 5483.7) / (1006.9 / 5607.2)
=0.19519667 / 0.17957269
=1.087

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)
=(582 / 5607.2) / (569 / 5483.7)
=0.41193466 / 0.41656181
=0.9889

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 - (4624.6 + 231.8) / 9458.9) / (1 - (5096.9 + 206.4) / 9890.4)
=0.48657878 / 0.46379317
=1.0491

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
=5483.7 / 5607.2
=0.978

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))
=(271.9 / (271.9 + 206.4)) / (270.2 / (270.2 + 231.8))
=0.56847167 / 0.53824701
=1.0562

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)
=(1174.9 / 5483.7) / (1169.3 / 5607.2)
=0.21425315 / 0.20853545
=1.0274

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)
=((2225.6 + 5399.4) / 9458.9) / ((2220.4 + 5885.4) / 9890.4)
=0.8061191 / 0.8195624
=0.9836

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
=(837.8 - -10.6 - 1071.1) / 9458.9
=-0.0235

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 -2.51 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.

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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 064.29771011.01421111.087
GMI 1.04631.04771.05181.03791.02661.01050.99710.98850.98750.9889
AQI 0.98020.99210.95880.95610.99331.02761.04881.04371.06971.0491
SGI 0.97770.97830.99471.00531.01341.01181.00180.99430.98120.978
DEPI 0.98971.0010.99480.98250.98170.9780.9740.99431.03441.0562
SGAI 1.10031.0751.07661.05251.00520.96340.9590.99261.0061.0274
LVGI 1.00830.97910.97940.98750.98060.9580.93820.96590.97180.9836
TATA -0.0283-0.0292-0.0263-0.0274-0.0246-0.0188-0.0194-0.0207-0.0228-0.0235
M-score -3.5655.61-2.60-3.53-2.57-2.51-2.53-2.56-2.57-2.51
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