Warner Bros. Discovery (WBO:WBDI) Beneish M-Score

: -2.84 (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 -2.84 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WBO:WBDI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.84 Med: -2.52 Max: -0.66
Current: -2.84

During the past 13 years, the highest Beneish M-Score of Warner Bros. Discovery was -0.66. The lowest was -2.84. And the median was -2.52.

Warner Bros. Discovery Beneish M-Score Historical Data

The historical data trend for Warner Bros. Discovery'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.

Warner Bros. Discovery Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.63

-2.67

-2.80

-0.66

-2.84

Warner Bros. Discovery Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-0.66	-0.41	-2.10	-2.66	-2.84

Competitive Comparison

For the Entertainment subindustry, Warner Bros. Discovery'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.

Warner Bros. Discovery Beneish M-Score Distribution

For the Media - Diversified industry and Communication Services sector, Warner Bros. Discovery's Beneish M-Score distribution charts can be found below:

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

Warner Bros. Discovery 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 Warner Bros. Discovery for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.7906

0.528 * 0.9725

0.404 * 0.9763

0.892 * 1.1804

0.115 * 1.0017

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8213

4.679 * -0.079632

0.327 * 0.9813

-2.87

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €6,705 Mil.
Revenue was 9430.428 + 9350.323 + 9560.434 + 9993.8 = €38,335 Mil.
Gross Profit was 4023.796 + 4375.79 + 3435.406 + 3750.01 = €15,585 Mil.
Total Current Assets was €13,038 Mil.
Total Assets was €112,568 Mil.
Property, Plant and Equipment(Net PPE) was €5,463 Mil.
Depreciation, Depletion and Amortization(DDA) was €22,274 Mil.
Selling, General, & Admin. Expense(SGA) was €8,993 Mil.
Total Current Liabilities was €14,059 Mil.
Long-Term Debt & Capital Lease Obligation was €38,412 Mil.
Net Income was -366.8 + -390.729 + -1144.52 + -998.446 = €-2,900 Mil.
Non Operating Income was -65.107 + -366.367 + -140.296 + -272.728 = €-844 Mil.
Cash Flow from Operations was 3281.026 + 2357.492 + 1858.922 + -589.354 = €6,908 Mil.

Total Receivables was €7,185 Mil.
Revenue was 10391.552 + 9921.23 + 9296.342 + 2868.372 = €32,477 Mil.
Gross Profit was 3826.976 + 4237.96 + 3029.092 + 1746.084 = €12,840 Mil.
Total Current Assets was €13,215 Mil.
Total Assets was €126,497 Mil.
Property, Plant and Equipment(Net PPE) was €5,004 Mil.
Depreciation, Depletion and Amortization(DDA) was €20,587 Mil.
Selling, General, & Admin. Expense(SGA) was €9,277 Mil.
Total Current Liabilities was €14,176 Mil.
Long-Term Debt & Capital Lease Obligation was €45,910 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)
	=	(6705.104 / 38334.985)	/	(7184.784 / 32477.496)
	=	0.174908	/	0.221223
	=	0.7906

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)
	=	(12840.112 / 32477.496)	/	(15585.002 / 38334.985)
	=	0.395354	/	0.406548
	=	0.9725

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 - (13037.906 + 5462.569) / 112568.169)	/	(1 - (13215.056 + 5004.144) / 126496.944)
	=	0.835651	/	0.855971
	=	0.9763

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
	=	38334.985	/	32477.496
	=	1.1804

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))
	=	(20587.494 / (20587.494 + 5004.144))	/	(22274.342 / (22274.342 + 5462.569))
	=	0.804462	/	0.803058
	=	1.0017

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)
	=	(8993.02 / 38334.985)	/	(9276.542 / 32477.496)
	=	0.23459	/	0.28563
	=	0.8213

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)
	=	((38412.213 + 14059.444) / 112568.169)	/	((45910.496 + 14176.048) / 126496.944)
	=	0.466132	/	0.475004
	=	0.9813

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
	=	(-2900.495 - -844.498	-	6908.086)	/	112568.169
	=	-0.079632

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.

Warner Bros. Discovery has a M-score of -2.87 suggests that the company is unlikely to be a manipulator.

Warner Bros. Discovery Beneish M-Score Related Terms

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Warner Bros. Discovery (WBO:WBDI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » Warner Bros. Discovery Inc (WBO:WBDI) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

WBD:USA 1WBD:Italy J5A:Germany DCVY34:Brazil

Address

230 Park Avenue South, New York, NY, USA, 10003

Website

https://www.wbd.com

Warner Bros. Discovery, the result of combining two large media firms, is one of the largest media firms in the world with tremendous scale and reach. The new company owns some of the biggest global networks including HBO, Discovery, CNN, and TLC and well-known franchises like Superman, Rick and Morty, and Game of Thrones. The firm's content production studios include Warner Bros., HBO, Discovery Studios, DC Films, and Cartoon Network Studios. The company operates two major streaming services, Max and Discovery+.

Warner Bros. Discovery (WBO:WBDI) Headlines

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