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Wells Fargo Beneish M-Score

: -2.81 (As of Today)
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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 -2.81 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

NYSE:WFC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.63   Med: -2.38   Max: 4.73
Current: -2.81

-3.63
4.73

During the past 13 years, the highest Beneish M-Score of Wells Fargo was 4.73. The lowest was -3.63. And the median was -2.38.


Wells Fargo Beneish M-Score Historical Data

* 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.

Wells Fargo Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.34 -2.30 -2.61 -2.57 -2.25

Wells Fargo Quarterly Data
Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21
Beneish M-Score 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 Premium Member Only Premium Member Only Premium Member Only -2.15 -2.44 -2.74 -2.25 -2.81

Competitive Comparison
* 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.
   

Wells Fargo Beneish M-Score Distribution

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



Wells Fargo 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 Wells Fargo 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 * 0.6902+0.528 * 1+0.404 * 0.9552+0.892 * 0.8984+0.115 * 0.8153
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1561+4.679 * 0.0133-0.327 * 0.8423
=-2.81

* 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 (Mar21) TTM:Last Year (Mar20) TTM:
Accounts Receivable was $32,378 Mil.
Revenue was 18063 + 18084 + 18844 + 17933 = $72,924 Mil.
Gross Profit was 18063 + 18084 + 18844 + 17933 = $72,924 Mil.
Total Current Assets was $535,695 Mil.
Total Assets was $1,959,543 Mil.
Property, Plant and Equipment(Net PPE) was $19,995 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,105 Mil.
Selling, General, & Admin. Expense(SGA) was $36,455 Mil.
Total Current Liabilities was $88,963 Mil.
Long-Term Debt & Capital Lease Obligation was $183,312 Mil.
Net Income was 4742 + 2992 + 2035 + -2379 = $7,390 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -3470 + -22765 + -8576 + 16119 = $-18,692 Mil.
Accounts Receivable was $52,213 Mil.
Revenue was 17717 + 19860 + 22010 + 21584 = $81,171 Mil.
Gross Profit was 17717 + 19860 + 22010 + 21584 = $81,171 Mil.
Total Current Assets was $473,387 Mil.
Total Assets was $1,981,349 Mil.
Property, Plant and Equipment(Net PPE) was $21,882 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,494 Mil.
Selling, General, & Admin. Expense(SGA) was $35,098 Mil.
Total Current Liabilities was $89,491 Mil.
Long-Term Debt & Capital Lease Obligation was $237,342 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(32378 / 72924) / (52213 / 81171)
=0.44399649 / 0.64324697
=0.6902

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)
=(81171 / 81171) / (72924 / 72924)
=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 - (535695 + 19995) / 1959543) / (1 - (473387 + 21882) / 1981349)
=0.71641857 / 0.75003445
=0.9552

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
=72924 / 81171
=0.8984

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))
=(7494 / (7494 + 21882)) / (9105 / (9105 + 19995))
=0.25510621 / 0.3128866
=0.8153

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)
=(36455 / 72924) / (35098 / 81171)
=0.49990401 / 0.43239581
=1.1561

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)
=((183312 + 88963) / 1959543) / ((237342 + 89491) / 1981349)
=0.13894821 / 0.16495479
=0.8423

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
=(7390 - 0 - -18692) / 1959543
=0.0133

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.

Wells Fargo has a M-score of -2.81 suggests that the company is unlikely to be a manipulator.


Wells Fargo Beneish M-Score Headlines

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