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Workday (NAS:WDAY) Beneish M-Score

: -3.05 (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 -3.05 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WDAY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.24   Med: -2.82   Max: -1.67
Current: -3.05

During the past 13 years, the highest Beneish M-Score of Workday was -1.67. The lowest was -3.24. And the median was -2.82.


Workday Beneish M-Score Historical Data

The historical data trend for Workday'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.

Workday Annual Data
Trend Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.84 -3.19 -3.24 -2.96 -3.05

Workday Quarterly Data
Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23
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 -2.96 -3.07 -2.97 -3.07 -3.05

Competitive Comparison

For the Software - Application subindustry, Workday'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.

   

Workday Beneish M-Score Distribution

For the Software industry and Technology sector, Workday's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Workday's Beneish M-Score falls in comparison to its industry or sector. The grey bar indicates the Beneish M-Score's extreme value range as defined by GuruFocus.



Workday 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 Workday 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 * 1.0447+0.528 * 0.9973+0.404 * 0.7812+0.892 * 1.2096+0.115 * 0.9985
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0407+4.679 * -0.14762-0.327 * 1.033
=-3.05

* 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 (Jan23) TTM:Last Year (Jan22) TTM:
Total Receivables was $1,570 Mil.
Revenue was 1646.26 + 1599.103 + 1535.798 + 1434.657 = $6,216 Mil.
Gross Profit was 1192.781 + 1163.31 + 1112.713 + 1031.836 = $4,501 Mil.
Total Current Assets was $8,108 Mil.
Total Assets was $13,486 Mil.
Property, Plant and Equipment(Net PPE) was $1,451 Mil.
Depreciation, Depletion and Amortization(DDA) was $364 Mil.
Selling, General, & Admin. Expense(SGA) was $2,452 Mil.
Total Current Liabilities was $4,628 Mil.
Long-Term Debt & Capital Lease Obligation was $3,158 Mil.
Net Income was -125.697 + -74.721 + -64.158 + -102.173 = $-367 Mil.
Non Operating Income was -7.648 + 2.537 + -17.843 + -10.152 = $-33 Mil.
Cash Flow from Operations was 694.452 + 408.668 + 114.358 + 439.717 = $1,657 Mil.
Total Receivables was $1,243 Mil.
Revenue was 1376.141 + 1327.263 + 1260.361 + 1175.033 = $5,139 Mil.
Gross Profit was 986.344 + 967.539 + 914.84 + 841.98 = $3,711 Mil.
Total Current Assets was $5,214 Mil.
Total Assets was $10,499 Mil.
Property, Plant and Equipment(Net PPE) was $1,371 Mil.
Depreciation, Depletion and Amortization(DDA) was $344 Mil.
Selling, General, & Admin. Expense(SGA) was $1,948 Mil.
Total Current Liabilities was $5,068 Mil.
Long-Term Debt & Capital Lease Obligation was $800 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)
=(1570.086 / 6215.818) / (1242.545 / 5138.798)
=0.252595 / 0.241797
=1.0447

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)
=(3710.703 / 5138.798) / (4500.64 / 6215.818)
=0.722096 / 0.724062
=0.9973

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 - (8108.224 + 1450.532) / 13486.238) / (1 - (5214.065 + 1370.883) / 10498.505)
=0.291221 / 0.372773
=0.7812

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
=6215.818 / 5138.798
=1.2096

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))
=(343.723 / (343.723 + 1370.883)) / (364.357 / (364.357 + 1450.532))
=0.200468 / 0.20076
=0.9985

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)
=(2452.18 / 6215.818) / (1947.933 / 5138.798)
=0.394506 / 0.379064
=1.0407

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)
=((3157.733 + 4628.166) / 13486.238) / ((799.81 + 5067.855) / 10498.505)
=0.577322 / 0.558905
=1.033

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
=(-366.749 - -33.106 - 1657.195) / 13486.238
=-0.14762

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.

Workday has a M-score of -3.05 suggests that the company is unlikely to be a manipulator.


Workday Beneish M-Score Related Terms

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


Workday (NAS:WDAY) Business Description

Workday logo
Traded in Other Exchanges
Address
6110 Stoneridge Mall Road, Pleasanton, CA, USA, 94588
Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 12,000 employees.
Executives
Frederick Wayne A.i. director 500 W MAIN ST., LOUISVILLE KY 40202
David A Duffield 10 percent owner C/O WORKDAY, INC., 6230 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Michael M Mcnamara director C/O FLEXTRONICS INTERNATIONAL LTD, 2090 FORTUNE DRIVE, SAN JOSE CA 95131
Thomas F Bogan director C/O WORKDAY, INC., 6110 STONERIDGE MALL RD, PLEASANTON CA 94588
Barbara A Larson officer: Chief Financial Officer 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Douglas A. Robinson officer: Co-President 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Lynne M Doughtie director C/O THE BOEING COMPANY, 100 RIVERSIDE PLAZA, MC 5003-1001, CHICAGO IL 60606-1596
Michael C Bush director 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Richard Harry Sauer officer: EVP, General Counsel & Secty 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Ann Marie Campbell director 2455 PACES FERRY ROAD, ATLANTA GA 30339
Petros Dermetzis officer: Chief Products Officer 321 LIVORNA HEIGHTS ROAD, ALAMO CA 94507
Carl M. Eschenbach director C/O SEQUOIA CAPITAL, 2800 SAND HILL ROAD, SUITE 101, PALO ALTO CA 94025
Gomez Luciano Fernandez officer: Co-President 1A SHAWFIELD STREET,, RICHARDSON HOUSE, LONDON X0 SW3 4BA
Styslinger Lee J Iii director 2826 BALMORAL ROAD, BIRMINGHAM AL 35223
Robynne Sisco officer: Chief Financial Officer 3401 HILLVIEW AVENUE, PALO ALTO CA 94304

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