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Westlake Beneish M-Score

: -2.01 (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 -2.01 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WLK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.22   Med: -2.49   Max: 4.16
Current: -2.01

During the past 13 years, the highest Beneish M-Score of Westlake was 4.16. The lowest was -3.22. And the median was -2.49.


Westlake Beneish M-Score Historical Data

The historical data trend for Westlake'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.

Westlake Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.44 -2.58 -2.48 -2.61 -2.26

Westlake Quarterly Data
Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22
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 -2.80 -2.63 -2.72 -2.26 -2.01

Competitive Comparison

For the Specialty Chemicals subindustry, Westlake'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.

   

Westlake Beneish M-Score Distribution

For the Chemicals industry and Basic Materials sector, Westlake's Beneish M-Score distribution charts can be found below:

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



Westlake 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 Westlake 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 * 1.0428+0.528 * 0.4971+0.404 * 1.3196+0.892 * 1.6997+0.115 * 1.0361
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7781+4.679 * -0.0162-0.327 * 1.0787
=-2.01

* 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 (Mar22) TTM:Last Year (Mar21) TTM:
Total Receivables was $2,352 Mil.
Revenue was 4056 + 3507 + 3055 + 2859 = $13,477 Mil.
Gross Profit was 1285 + 1096 + 1018 + 872 = $4,271 Mil.
Total Current Assets was $5,405 Mil.
Total Assets was $19,741 Mil.
Property, Plant and Equipment(Net PPE) was $8,907 Mil.
Depreciation, Depletion and Amortization(DDA) was $902 Mil.
Selling, General, & Admin. Expense(SGA) was $615 Mil.
Total Current Liabilities was $2,550 Mil.
Long-Term Debt & Capital Lease Obligation was $5,416 Mil.
Net Income was 756 + 644 + 607 + 522 = $2,529 Mil.
Non Operating Income was 0 + 3 + 7 + 10 = $20 Mil.
Cash Flow from Operations was 700 + 757 + 755 + 617 = $2,829 Mil.
Total Receivables was $1,327 Mil.
Revenue was 2357 + 1965 + 1898 + 1709 = $7,929 Mil.
Gross Profit was 509 + 323 + 248 + 169 = $1,249 Mil.
Total Current Assets was $3,734 Mil.
Total Assets was $14,050 Mil.
Property, Plant and Equipment(Net PPE) was $7,388 Mil.
Depreciation, Depletion and Amortization(DDA) was $778 Mil.
Selling, General, & Admin. Expense(SGA) was $465 Mil.
Total Current Liabilities was $1,326 Mil.
Long-Term Debt & Capital Lease Obligation was $3,930 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)
=(2352 / 13477) / (1327 / 7929)
=0.17451955 / 0.16736032
=1.0428

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)
=(1249 / 7929) / (4271 / 13477)
=0.15752302 / 0.31691029
=0.4971

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 - (5405 + 8907) / 19741) / (1 - (3734 + 7388) / 14050)
=0.2750114 / 0.20839858
=1.3196

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
=13477 / 7929
=1.6997

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))
=(778 / (778 + 7388)) / (902 / (902 + 8907))
=0.09527308 / 0.09195637
=1.0361

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)
=(615 / 13477) / (465 / 7929)
=0.0456333 / 0.05864548
=0.7781

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)
=((5416 + 2550) / 19741) / ((3930 + 1326) / 14050)
=0.40352566 / 0.37409253
=1.0787

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
=(2529 - 20 - 2829) / 19741
=-0.0162

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.

Westlake has a M-score of -2.01 suggests that the company is unlikely to be a manipulator.


Westlake Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Westlake's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Westlake Business Description

Westlake logo
Industry
Basic Materials » Chemicals NAICS : 325110 SIC : 2869
Traded in Other Exchanges
Address
2801 Post Oak Boulevard, Suite 600, Houston, TX, USA, 77056
Westlake Corp is a manufacturer and global supplier of chemicals, polymers and building products. Its Performance & Essential Materials segment offers a wide range of essential building blocks for making products utilized in everyday living, including olefins, vinyl chemicals, polyethylene, and epoxies. Its Housing & Infrastructure Products segment produces key finished goods for building products, pipe & fittings, and global compounds businesses.
Executives
Sheets Jeffrey Wayne director 600 N. DAIRY ASHFORD HOUSTON TX 77079
Chao John Tsung-chen director, 10 percent owner 26 GRAMERCY PARK SOUTH, 7EF NEW YORK NY 10003
Chao David Tsung-hung director, 10 percent owner 1000 UPTOWN PARK BLVD. #34 HOUSTON TX 77056
Haas Marius director ONE DELL WAY ROUND ROCK TX 78682
Graff Michael J director 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056
Northcutt R Bruce director 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056
Jenkins Dorothy C director, 10 percent owner 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056
Lubel Kimberly S director P.O. BOX 696000 SAN ANTONIO TX 78269-6000
Mccollum Mark A director 3000 NORTH SAM HOUSTON PARKWAY E. HOUSTON TX 77002
Kearns Roger L. officer: EVP, Vinyls Chemicals 2801 POST OAK BLVD. HOUSTON TX 77056
Zoeller Johnathan Stevan officer: VP and CAO 2801 POST OAK BLVD. SUITE 600 HOUSTON TX 77056
Ttwfgp Llc 10 percent owner 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056
Chao Albert director, 10 percent owner, officer: President & CEO 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056
Kenner Andrew officer: SVP - Chemical Manufacturing 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056
Bender Mark Steven officer: EVP and CFO 2801 POST OAK BLVD, SUITE 600 HOUSTON TX 77056

Westlake Headlines

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