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Wells Fargo Beneish M-Score

: -2.54 (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 -2.54 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

NYSE:WFC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.63   Med: -2.38   Max: 4.73
Current: -2.54

-3.63
4.73

During the past 13 years, the highest Beneish M-Score of Wells Fargo was 4.73. The lowest was -3.63. And the median was -2.38.


Wells Fargo Beneish M-Score Historical Data

The historical data trend for Wells Fargo'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.

Wells Fargo Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.33 -2.30 -2.68 -2.63 -2.16

Wells Fargo Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
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 -2.52 -2.80 -2.16 -2.83 -2.54

Competitive Comparison

For the Banks - Diversified subindustry, Wells Fargo'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.

   

Wells Fargo Beneish M-Score Distribution

For the Banks industry and Financial Services sector, Wells Fargo's Beneish M-Score distribution charts can be found below:

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



Wells Fargo 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 Wells Fargo 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 * 0.7899+0.528 * 1+0.404 * 1.0023+0.892 * 0.9665+0.115 * 0.8444
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0652+4.679 * 0.0302-0.327 * 0.8432
=-2.54

* 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 (Jun21) TTM:Last Year (Jun20) TTM:
Accounts Receivable was $26,596 Mil.
Revenue was 20270 + 18063 + 18084 + 18844 = $75,261 Mil.
Gross Profit was 20270 + 18063 + 18084 + 18844 = $75,261 Mil.
Total Current Assets was $343,294 Mil.
Total Assets was $1,945,996 Mil.
Property, Plant and Equipment(Net PPE) was $19,571 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,051 Mil.
Selling, General, & Admin. Expense(SGA) was $36,174 Mil.
Total Current Liabilities was $84,482 Mil.
Long-Term Debt & Capital Lease Obligation was $179,656 Mil.
Net Income was 6040 + 4742 + 2992 + 2035 = $15,809 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -8062 + -3470 + -22765 + -8576 = $-42,873 Mil.
Accounts Receivable was $34,840 Mil.
Revenue was 18286 + 17717 + 19860 + 22010 = $77,873 Mil.
Gross Profit was 18286 + 17717 + 19860 + 22010 = $77,873 Mil.
Total Current Assets was $349,210 Mil.
Total Assets was $1,968,766 Mil.
Property, Plant and Equipment(Net PPE) was $21,503 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,833 Mil.
Selling, General, & Admin. Expense(SGA) was $35,137 Mil.
Total Current Liabilities was $85,985 Mil.
Long-Term Debt & Capital Lease Obligation was $230,921 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)
=(26596 / 75261) / (34840 / 77873)
=0.35338356 / 0.44739512
=0.7899

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)
=(77873 / 77873) / (75261 / 75261)
=1 / 1
=1

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 - (343294 + 19571) / 1945996) / (1 - (349210 + 21503) / 1968766)
=0.8135325 / 0.81170286
=1.0023

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
=75261 / 77873
=0.9665

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))
=(7833 / (7833 + 21503)) / (9051 / (9051 + 19571))
=0.26700982 / 0.31622528
=0.8444

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)
=(36174 / 75261) / (35137 / 77873)
=0.48064735 / 0.45120902
=1.0652

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)
=((179656 + 84482) / 1945996) / ((230921 + 85985) / 1968766)
=0.13573409 / 0.16096682
=0.8432

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
=(15809 - 0 - -42873) / 1945996
=0.0302

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.

Wells Fargo has a M-score of -2.54 suggests that the company is unlikely to be a manipulator.


Wells Fargo Beneish M-Score Related Terms

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


Wells Fargo Business Description

Wells Fargo logo
Industry
Financial Services » Banks NAICS : 522110 SIC : 6021
Address
420 Montgomery Street, San Francisco, CA, USA, 94104
Wells Fargo is one of the largest banks in the United States, with approximately $1.9 trillion in balance sheet assets. The company is split into four primary segments: consumer banking, commercial banking, corporate and investment banking, and wealth and investment management. It is almost entirely focused on the U.S.
Executives
Scharf Charles W director, officer: CEO & President C/O VISA INC. 900 METRO CENTER BLVD. FOSTER CITY CA 94404
Williams Ather Iii officer: Sr. Executive Vice President 30 HUDSON YARDS NEW YORK NY 10001
Santomassimo Michael P. officer: Sr. EVP & CFO 225 LIBERTY STREET NEW YORK NY 10286
Noski Charles H director ONE PICKWICK PLAZA GREENWICH CT 06830
Hewett Wayne M. director 5 WESTBROOK CORPORATE CENTER WESTCHESTER IL 60154
Chancy Mark A director 303 PEACHTREE ST. 30TH FLOOR ATLANTA GA 30308
Black Steven D director C/O JPMORGAN CHASE & CO. 270 PARK AVENUE NEW YORK NY 10017
Clark Celeste A. director C/O ADVANCEPIERRE FOODS HOLDINGS, INC. 9987 CARVER ROAD BLUE ASH OH 45242
Sargent Ronald director 1014 VINE STREET CINCINNATI OH 45202
Owens Lester officer: Sr. Executive Vice President 240 GREENWICH STREET NEW YORK NY 10286
Galloreese David officer: Sr. Executive Vice President 420 MONTGOMERY STREET SAN FRANCISCO CA 94104
Norton Amanda G officer: Sr. EVP and Chief Risk Officer 420 MONTGOMERY STREET SAN FRANCISCO CA 94104
Flowers Derek A. officer: Sr. Executive Vice President 301 SOUTH COLLEGE STREET CHARLOTTE NC 28202
Craver Theodore F Jr director DUKE ENERGY CORPORATION 550 SOUTH TRYON STREET - DEC45A CHARLOTTE NC 28202
Sommers Barry officer: Sr. Executive Vice President 30 HUDSON YARDS NEW YORK NY 10001

Wells Fargo Headlines

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