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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 -2.59 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
The historical rank and industry rank for The Wendy's Co's Beneish M-Score or its related term are showing as below:
During the past 13 years, the highest Beneish M-Score of The Wendy's Co was -2.34. The lowest was -2.75. And the median was -2.55.
The historical data trend for The Wendy's Co'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.
The Wendy's Co Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Beneish M-Score | Get a 7-Day Free Trial | -2.47 | -2.75 | -2.57 | -2.52 | -2.59 |
The Wendy's Co 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 | -2.52 | -2.33 | -2.28 | -2.51 | -2.59 |
For the Restaurants subindustry, The Wendy's Co'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.
For the Restaurants industry and Consumer Cyclical sector, The Wendy's Co's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where The Wendy's Co's Beneish M-Score falls into.
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 The Wendy's Co 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 * 1.0039 | + | 0.528 * 0.9638 | + | 0.404 * 1.0458 | + | 0.892 * 1.0411 | + | 0.115 * 0.8931 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 0.9378 | + | 4.679 * -0.030128 | - | 0.327 * 1.026 | |||||||
= | -2.59 |
* 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 (Dec23) TTM: | Last Year (Dec22) TTM: |
Total Receivables was $122 Mil. Revenue was 540.651 + 550.555 + 561.565 + 528.807 = $2,182 Mil. Gross Profit was 208.937 + 191.056 + 165.954 + 179.221 = $745 Mil. Total Current Assets was $838 Mil. Total Assets was $5,183 Mil. Property, Plant and Equipment(Net PPE) was $1,826 Mil. Depreciation, Depletion and Amortization(DDA) was $149 Mil. Selling, General, & Admin. Expense(SGA) was $219 Mil. Total Current Liabilities was $382 Mil. Long-Term Debt & Capital Lease Obligation was $4,041 Mil. Net Income was 46.938 + 58.049 + 59.632 + 39.821 = $204 Mil. Non Operating Income was 9.896 + 6.568 + 0.981 + -2.271 = $15 Mil. Cash Flow from Operations was 75.891 + 128.021 + 88.529 + 52.975 = $345 Mil. |
Total Receivables was $116 Mil. Revenue was 536.51 + 532.569 + 537.783 + 488.643 = $2,096 Mil. Gross Profit was 203.665 + 177.317 + 150.037 + 158.838 = $690 Mil. Total Current Assets was $1,058 Mil. Total Assets was $5,499 Mil. Property, Plant and Equipment(Net PPE) was $1,885 Mil. Depreciation, Depletion and Amortization(DDA) was $136 Mil. Selling, General, & Admin. Expense(SGA) was $224 Mil. Total Current Liabilities was $388 Mil. Long-Term Debt & Capital Lease Obligation was $4,186 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) |
= | (121.683 / 2181.578) | / | (116.426 / 2095.505) | |
= | 0.055778 | / | 0.05556 | |
= | 1.0039 |
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) | |
= | (689.857 / 2095.505) | / | (745.168 / 2181.578) | |
= | 0.329208 | / | 0.341573 | |
= | 0.9638 |
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 - (837.653 + 1825.631) / 5182.826) | / | (1 - (1058.283 + 1884.846) / 5499.344) | |
= | 0.486133 | / | 0.464822 | |
= | 1.0458 |
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 | |
= | 2181.578 | / | 2095.505 | |
= | 1.0411 |
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)) |
= | (135.808 / (135.808 + 1884.846)) | / | (148.567 / (148.567 + 1825.631)) | |
= | 0.06721 | / | 0.075254 | |
= | 0.8931 |
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) |
= | (218.664 / 2181.578) | / | (223.979 / 2095.505) | |
= | 0.100232 | / | 0.106885 | |
= | 0.9378 |
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) |
= | ((4040.921 + 381.93) / 5182.826) | / | ((4186.124 + 387.999) / 5499.344) | |
= | 0.853367 | / | 0.831758 | |
= | 1.026 |
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 | |
= | (204.44 - 15.174 | - | 345.416) | / | 5182.826 | |
= | -0.030128 |
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.
The Wendy's Co has a M-score of -2.59 suggests that the company is unlikely to be a manipulator.
Thank you for viewing the detailed overview of The Wendy's Co's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Joseph A Levato | director | C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
Trian Fund Management, L.p. | other: Schedule 13D Filer | 280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017 |
Kenneth W Gilbert | director | C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
Michelle Caruso-cabrera | director | C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
Liliana Esposito | officer: Chief Communications Officer | ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
Nelson Peltz | director, 10 percent owner, officer: Chairman and CEO | 223 SUNSET AVENUE, PALM BEACH FL 33480 |
Edward P Garden | officer: Executive Vice President | 223 SUNSET AVENUE, PALM BEACH FL 33480 |
Peter W May | director, 10 percent owner, officer: President and COO | 223 SUNSET AVENUE, PALM BEACH FL 33480 |
Matthew H. Peltz | director | 280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017 |
Trian Partners Master Fund, L.p. | other: Schedule 13D Filer | 280 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10017 |
Deepak Ajmani | officer: Chief Operations Officer - U.S | C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
Juan Carlos Loredo | officer: Global Chief Marketing Officer | C/O THE WENDY'S COMPANY, ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
Suzanne M. Thuerk | officer: Chief Accounting Officer | ONE DAVE THOMAS BLVD., C/O THE WENDY'S COMPANY, DUBLIN OH 43017 |
Richard H. Gomez | director | 1000 NICOLLET MALL, MINNEAPOLIS MN 55403 |
O'brien Matthew Coley | officer: Chief People Officer | ONE DAVE THOMAS BLVD., DUBLIN OH 43017 |
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