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WH Smith (LSE:SMWH) Beneish M-Score : -2.73 (As of Dec. 12, 2024)


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What is WH Smith Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.73 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for WH Smith's Beneish M-Score or its related term are showing as below:

LSE:SMWH' s Beneish M-Score Range Over the Past 10 Years
Min: -3.96   Med: -2.74   Max: -1.75
Current: -2.73

During the past 13 years, the highest Beneish M-Score of WH Smith was -1.75. The lowest was -3.96. And the median was -2.74.


WH Smith Beneish M-Score Historical Data

The historical data trend for WH Smith's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

WH Smith Beneish M-Score Chart

WH Smith Annual Data
Trend Aug15 Aug16 Aug17 Aug18 Aug19 Aug20 Aug21 Aug22 Aug23 Aug24
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -3.96 -3.19 -2.00 -2.73 -2.73

WH Smith Semi-Annual Data
Feb15 Aug15 Feb16 Aug16 Feb17 Aug17 Feb18 Aug18 Feb19 Aug19 Feb20 Aug20 Feb21 Aug21 Feb22 Aug22 Feb23 Aug23 Feb24 Aug24
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.00 - -2.73 - -2.73

Competitive Comparison of WH Smith's Beneish M-Score

For the Specialty Retail subindustry, WH Smith's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


WH Smith's Beneish M-Score Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, WH Smith's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where WH Smith's Beneish M-Score falls into.



WH Smith Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 WH Smith 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 * 1.2818+0.528 * 0.9806+0.404 * 0.8481+0.892 * 1.0697+0.115 * 1.037
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9973+4.679 * -0.111289-0.327 * 0.962
=-2.73

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Aug24) TTM:Last Year (Aug23) TTM:
Total Receivables was £133 Mil.
Revenue was £1,918 Mil.
Gross Profit was £1,212 Mil.
Total Current Assets was £511 Mil.
Total Assets was £1,869 Mil.
Property, Plant and Equipment(Net PPE) was £821 Mil.
Depreciation, Depletion and Amortization(DDA) was £176 Mil.
Selling, General, & Admin. Expense(SGA) was £1,006 Mil.
Total Current Liabilities was £599 Mil.
Long-Term Debt & Capital Lease Obligation was £811 Mil.
Net Income was £67 Mil.
Gross Profit was £0 Mil.
Cash Flow from Operations was £275 Mil.
Total Receivables was £97 Mil.
Revenue was £1,793 Mil.
Gross Profit was £1,111 Mil.
Total Current Assets was £377 Mil.
Total Assets was £1,650 Mil.
Property, Plant and Equipment(Net PPE) was £714 Mil.
Depreciation, Depletion and Amortization(DDA) was £160 Mil.
Selling, General, & Admin. Expense(SGA) was £943 Mil.
Total Current Liabilities was £543 Mil.
Long-Term Debt & Capital Lease Obligation was £751 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(133 / 1918) / (97 / 1793)
=0.069343 / 0.054099
=1.2818

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)
=(1111 / 1793) / (1212 / 1918)
=0.619632 / 0.631908
=0.9806

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (511 + 821) / 1869) / (1 - (377 + 714) / 1650)
=0.287319 / 0.338788
=0.8481

4. SGI = Sales Growth Index

Ratio of Revenue 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
=1918 / 1793
=1.0697

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(160 / (160 + 714)) / (176 / (176 + 821))
=0.183066 / 0.17653
=1.037

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(1006 / 1918) / (943 / 1793)
=0.524505 / 0.525934
=0.9973

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((811 + 599) / 1869) / ((751 + 543) / 1650)
=0.754414 / 0.784242
=0.962

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
=(67 - 0 - 275) / 1869
=-0.111289

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

WH Smith has a M-score of -2.73 suggests that the company is unlikely to be a manipulator.


WH Smith Beneish M-Score Related Terms

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WH Smith Business Description

Traded in Other Exchanges
Address
Greenbridge Road, Swindon, Wiltshire, GBR, SN3 3RX
WH Smith PLC is a U.K. retailer selling a wide range of products. Its two core business segments are travel and high street. WHSmith's travel stores offer products such as food, drink, publications, books, and tech accessories and other products to travelers. This segment operates predominantly in airports, railway stations, hospitals, and workplaces across Europe, Australia, the Middle East, Southeast Asia, and India. The high street segment operates stores in the United Kingdom, predominantly on the U.K. high street. The high street segment sells products into the following categories: stationery, books, newspapers, magazines, and confectionery. WH Smith also has an online retail business that sells a range of books, stationery, magazines, and gifts through its websites.

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