Switch to:
GuruFocus has detected 4 Warning Signs with Westwood Holdings Group Inc $WHG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Westwood Holdings Group Inc (NYSE:WHG)
Beneish M-Score
-2.79 (As of Today)

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.

Westwood Holdings Group Inc has a M-score of -2.79 suggests that the company is not a manipulator.

WHG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.7   Max: -0.34
Current: -2.79

-3.7
-0.34

During the past 13 years, the highest Beneish M-Score of Westwood Holdings Group Inc was -0.34. The lowest was -3.70. And the median was -2.45.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Westwood Holdings Group Inc 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 * 1.0077+0.528 * 1+0.404 * 0.9532+0.892 * 0.9698+0.115 * 1.0628
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0245+4.679 * -0.0898-0.327 * 0.5469
=-2.79

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $25.2 Mil.
Revenue was 32.623 + 31.092 + 31.777 + 31.023 = $126.5 Mil.
Gross Profit was 32.623 + 31.092 + 31.777 + 31.023 = $126.5 Mil.
Total Current Assets was $103.0 Mil.
Total Assets was $166.1 Mil.
Property, Plant and Equipment(Net PPE) was $4.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.9 Mil.
Selling, General & Admin. Expense(SGA) was $90.4 Mil.
Total Current Liabilities was $18.1 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 6.064 + 7.577 + 5.887 + 5.661 = $25.2 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 9.941 + 8.395 + 8.387 + 13.385 = $40.1 Mil.
Accounts Receivable was $25.8 Mil.
Revenue was 29.129 + 31.566 + 32.451 + 37.311 = $130.5 Mil.
Gross Profit was 29.129 + 31.566 + 32.451 + 37.311 = $130.5 Mil.
Total Current Assets was $99.2 Mil.
Total Assets was $164.5 Mil.
Property, Plant and Equipment(Net PPE) was $4.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.1 Mil.
Selling, General & Admin. Expense(SGA) was $91.0 Mil.
Total Current Liabilities was $32.7 Mil.
Long-Term Debt was $0.0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(25.208 / 126.515) / (25.796 / 130.457)
=0.1992491 / 0.19773565
=1.0077

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)
=(130.457 / 130.457) / (126.515 / 126.515)
=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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (103.006 + 4.19) / 166.104) / (1 - (99.239 + 4.027) / 164.452)
=0.35464528 / 0.37205993
=0.9532

4. SGI = Sales Growth Index

Ratio of sales 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
=126.515 / 130.457
=0.9698

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(3.109 / (3.109 + 4.027)) / (2.911 / (2.911 + 4.19))
=0.43567825 / 0.40994226
=1.0628

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(90.381 / 126.515) / (90.969 / 130.457)
=0.7143896 / 0.69731022
=1.0245

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)
=((0 + 18.077) / 166.104) / ((0 + 32.722) / 164.452)
=0.10882941 / 0.19897599
=0.5469

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
=(25.189 - 0 - 40.108) / 166.104
=-0.0898

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.

Westwood Holdings Group Inc has a M-score of -2.79 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

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

Westwood Holdings Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.59941.49610.55340.88240.84191.02921.36890.81491.16691.2711
GMI 1111111111
AQI 0.73920.98281.30272.72360.7761.010.83180.89732.56910.9748
SGI 1.32631.28010.9161.29991.24581.12461.18491.23321.15630.9396
DEPI 0.9670.83840.70760.55152.18010.91731.26520.83290.48451.3345
SGAI 4.39871.58491.10320.93970.99551.11590.93590.90591.07751.0679
LVGI 1.26850.98040.83070.85241.19611.00741.09910.90821.27180.6676
TATA -0.09590.3314-0.0453-0.0963-0.0426-0.0144-0.03390.0052-0.155-0.1377
M-score -2.87-0.34-3.05-2.07-2.62-2.44-2.19-2.43-2.44-2.80

Westwood Holdings Group Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.81490.84041.11831.25291.16691.55760.96971.17891.27111.0077
GMI 1111111111
AQI 0.89730.94682.40052.1012.56912.60231.0581.08750.97480.9532
SGI 1.23321.19681.17321.15791.15631.1161.0070.96760.93960.9698
DEPI 0.83290.94980.83130.6810.48450.56570.65640.85151.33451.0628
SGAI 0.90590.95521.01171.06161.07751.08541.12711.12121.06791.0245
LVGI 0.90821.28971.44721.05581.27181.59750.69820.7440.66760.5469
TATA 0.00520.0125-0.1675-0.1736-0.155-0.2045-0.1239-0.1346-0.1377-0.0898
M-score -2.43-2.51-2.60-2.54-2.44-2.43-3.02-2.89-2.80-2.79
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK