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Western Digital Beneish M-Score

: -2.28 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Western Digital has a M-score of -2.28 suggests that the company is not a manipulator.

NAS:WDC' s Beneish M-Score Range Over the Past 10 Years
Min: -16.55   Med: -2.77   Max: 14.3
Current: -2.28

-16.55
14.3

During the past 13 years, the highest Beneish M-Score of Western Digital was 14.30. The lowest was -16.55. And the median was -2.77.


Western Digital Beneish M-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Western Digital Annual Data
Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.82 -2.52 -2.62 -2.79 -2.98

Western Digital Quarterly Data
Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19
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 -2.76 -3.03 -2.98 -2.75 -2.28

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.


Western Digital Beneish M-Score Distribution

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



Western Digital 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 Western Digital 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 * 1.2996+0.528 * 1.9045+0.404 * 1.0369+0.892 * 0.8036+0.115 * 1.0189
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1212+4.679 * -0.0773-0.327 * 1.0297
=-2.28

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec19) TTM:Last Year (Dec18) TTM:
Accounts Receivable was $1,791 Mil.
Revenue was 4234 + 4040 + 3634 + 3674 = $15,582 Mil.
Gross Profit was 935 + 758 + 465 + 579 = $2,737 Mil.
Total Current Assets was $8,627 Mil.
Total Assets was $25,860 Mil.
Property, Plant and Equipment(Net PPE) was $2,722 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,665 Mil.
Selling, General, & Admin. Expense(SGA) was $1,255 Mil.
Total Current Liabilities was $4,482 Mil.
Long-Term Debt & Capital Lease Obligation was $9,547 Mil.
Net Income was -139 + -276 + -197 + -581 = $-1,193 Mil.
Non Operating Income was -2 + -6 + -14 + -54 = $-76 Mil.
Cash Flow from Operations was 257 + 253 + 169 + 204 = $883 Mil.
Accounts Receivable was $1,715 Mil.
Revenue was 4233 + 5028 + 5117 + 5013 = $19,391 Mil.
Gross Profit was 1044 + 1664 + 1852 + 1927 = $6,487 Mil.
Total Current Assets was $9,742 Mil.
Total Assets was $27,939 Mil.
Property, Plant and Equipment(Net PPE) was $3,077 Mil.
(DDA) was $1,940 Mil.
Selling, General, & Admin. Expense(SGA) was $1,393 Mil.
Total Current Liabilities was $4,350 Mil.
Long-Term Debt & Capital Lease Obligation was $10,370 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)
=(1791 / 15582) / (1715 / 19391)
=0.11494032 / 0.08844309
=1.2996

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)
=(6487 / 19391) / (2737 / 15582)
=0.33453664 / 0.17565139
=1.9045

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 - (8627 + 2722) / 25860) / (1 - (9742 + 3077) / 27939)
=0.56113689 / 0.541179
=1.0369

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
=15582 / 19391
=0.8036

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))
=(1940 / (1940 + 3077)) / (1665 / (1665 + 2722))
=0.38668527 / 0.37953043
=1.0189

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(1255 / 15582) / (1393 / 19391)
=0.08054165 / 0.07183745
=1.1212

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((9547 + 4482) / 25860) / ((10370 + 4350) / 27939)
=0.54249807 / 0.52686209
=1.0297

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
=(-1193 - -76 - 883) / 25860
=-0.0773

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Western Digital has a M-score of -2.28 suggests that the company will not be a manipulator.


Western Digital Beneish M-Score Headlines

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