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# World Acceptance (MEX:WRLD) Beneish M-Score

: -3.60 (As of Today)
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Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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 -3.6 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MEX:WRLD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.84   Med: -3.07   Max: 0.58
Current: -3.6

During the past 13 years, the highest Beneish M-Score of World Acceptance was 0.58. The lowest was -3.84. And the median was -3.07.

## World Acceptance 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 World Acceptance 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 + 0.404 * 0.9936 + 0.892 * 1.0539 + 0.115 * 0.831 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 0.8801 + 4.679 * -0.257774 - 0.327 * 1.0396 = -3.65

* 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 (Dec22) TTM: Last Year (Dec21) TTM: Total Receivables was MXN55 Mil. Revenue was 2597.5095057048 + 2773.4015645963 + 2929.8788446273 + 3190.2577008799 = MXN11,491 Mil. Gross Profit was 2597.5095057048 + 2773.4015645963 + 2929.8788446273 + 3190.2577008799 = MXN11,491 Mil. Total Current Assets was MXN466 Mil. Total Assets was MXN23,871 Mil. Property, Plant and Equipment(Net PPE) was MXN2,115 Mil. Depreciation, Depletion and Amortization(DDA) was MXN223 Mil. Selling, General, & Admin. Expense(SGA) was MXN4,575 Mil. Total Current Liabilities was MXN957 Mil. Long-Term Debt & Capital Lease Obligation was MXN15,860 Mil. Net Income was 112.96163323935 + -27.414117380194 + -176.14891045796 + 377.64716109355 = MXN287 Mil. Non Operating Income was 0 + 0 + 0 + 0 = MXN0 Mil. Cash Flow from Operations was 1357.6579972729 + 1575.0072708621 + 1164.1275887439 + 2343.5202542217 = MXN6,440 Mil. Total Receivables was MXN0 Mil. Revenue was 2896.283953599 + 2628.304311425 + 2487.0585587991 + 2891.3049990603 = MXN10,903 Mil. Gross Profit was 2896.283953599 + 2628.304311425 + 2487.0585587991 + 2891.3049990603 = MXN10,903 Mil. Total Current Assets was MXN391 Mil. Total Assets was MXN26,580 Mil. Property, Plant and Equipment(Net PPE) was MXN2,330 Mil. Depreciation, Depletion and Amortization(DDA) was MXN201 Mil. Selling, General, & Admin. Expense(SGA) was MXN4,932 Mil. Total Current Liabilities was MXN1,102 Mil. Long-Term Debt & Capital Lease Obligation was MXN16,911 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) = (54.725292019062 / 11491.047615808) / (0 / 10902.951822883) = 0.004762 / 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) = (10902.951822883 / 10902.951822883) / (11491.047615808 / 11491.047615808) = 1 / 1 = 1

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 - (465.89072976228 + 2114.7696627366) / 23870.780082715) / (1 - (390.64656767615 + 2329.8171340686) / 26580.309807965) = 0.89189 / 0.897651 = 0.9936

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 = 11491.047615808 / 10902.951822883 = 1.0539

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)) = (200.59241400559 / (200.59241400559 + 2329.8171340686)) / (223.01968997511 / (223.01968997511 + 2114.7696627366)) = 0.079273 / 0.095398 = 0.831

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) = (4574.5516668515 / 11491.047615808) / (4931.7786477917 / 10902.951822883) = 0.398097 / 0.452334 = 0.8801

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) = ((15859.566160324 + 957.22185513342) / 23870.780082715) / ((16911.137625981 + 1101.9213070865) / 26580.309807965) = 0.704493 / 0.677684 = 1.0396

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 = (287.04576649475 - 0 - 6440.3131111006) / 23870.780082715 = -0.257774

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.

World Acceptance has a M-score of -3.65 suggests that the company is unlikely to be a manipulator.

## World Acceptance Beneish M-Score Related Terms

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## World Acceptance (MEX:WRLD) Business Description

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