Watsco Beneish M-Score Historical Data
The historical data trend for Watsco'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.
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Watsco Annual Data
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Trend |
Dec14 |
Dec15 |
Dec16 |
Dec17 |
Dec18 |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
Dec23 |
| Beneish M-Score |
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-2.53 |
-2.93 |
-2.33 |
-2.47 |
-2.39 |
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Watsco Quarterly Data
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Mar19 |
Jun19 |
Sep19 |
Dec19 |
Mar20 |
Jun20 |
Sep20 |
Dec20 |
Mar21 |
Jun21 |
Sep21 |
Dec21 |
Mar22 |
Jun22 |
Sep22 |
Dec22 |
Mar23 |
Jun23 |
Sep23 |
Dec23 |
| Beneish M-Score |
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-2.47 |
-2.55 |
-2.32 |
-2.27 |
-2.39 |
Competitive Comparison
For the Industrial Distribution subindustry, Watsco'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.
Watsco Beneish M-Score Distribution
For the Industrial Distribution industry and Industrials sector, Watsco's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Watsco's Beneish M-Score falls into.
Watsco 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 Watsco 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 * 1.0665 | + | 0.528 * 1.0205 | + | 0.404 * 1.0425 | + | 0.892 * 1.0013 | + | 0.115 * 1.0278 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0004 | + | 4.679 * -0.012335 | - | 0.327 * 0.8268 |
| = | -2.39 |
* 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 $798 Mil.
Revenue was 1603.197 + 2126.845 + 2003.084 + 1550.641 = $7,284 Mil.
Gross Profit was 414.416 + 566.945 + 562.622 + 448.157 = $1,992 Mil.
Total Current Assets was $2,392 Mil.
Total Assets was $3,729 Mil.
Property, Plant and Equipment(Net PPE) was $505 Mil.
Depreciation, Depletion and Amortization(DDA) was $35 Mil.
Selling, General, & Admin. Expense(SGA) was $1,224 Mil.
Total Current Liabilities was $712 Mil.
Long-Term Debt & Capital Lease Obligation was $305 Mil.
Net Income was 82.547 + 170.953 + 172.764 + 110.073 = $536 Mil.
Non Operating Income was 0 + 9.506 + 7.238 + 3.64 = $20 Mil.
Cash Flow from Operations was 298.614 + 352.519 + -41.758 + -47.421 = $562 Mil.
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Total Receivables was $747 Mil.
Revenue was 1581.223 + 2035.796 + 2133.755 + 1523.57 = $7,274 Mil.
Gross Profit was 433.55 + 550.848 + 595.533 + 450.358 = $2,030 Mil.
Total Current Assets was $2,299 Mil.
Total Assets was $3,488 Mil.
Property, Plant and Equipment(Net PPE) was $443 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General, & Admin. Expense(SGA) was $1,221 Mil.
Total Current Liabilities was $907 Mil.
Long-Term Debt & Capital Lease Obligation was $244 Mil.
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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) |
| = | (797.832 / 7283.767) | / | (747.11 / 7274.344) |
| = | 0.109536 | / | 0.102705 |
| | = | 1.0665 |
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) |
| = | (2030.289 / 7274.344) | / | (1992.14 / 7283.767) |
| = | 0.279103 | / | 0.273504 |
| | = | 1.0205 |
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 - (2391.931 + 504.978) / 3729.182) | / | (1 - (2298.739 + 442.738) / 3488.214) |
| = | 0.223178 | / | 0.214074 |
| | = | 1.0425 |
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 |
| = | 7283.767 | / | 7274.344 |
| | = | 1.0013 |
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)) |
| = | (31.683 / (31.683 + 442.738)) | / | (35.09 / (35.09 + 504.978)) |
| = | 0.066782 | / | 0.064973 |
| | = | 1.0278 |
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) |
| = | (1223.507 / 7283.767) | / | (1221.382 / 7274.344) |
| = | 0.167977 | / | 0.167903 |
| | = | 1.0004 |
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) |
| = | ((304.527 + 712.012) / 3729.182) | / | ((243.532 + 906.522) / 3488.214) |
| = | 0.27259 | / | 0.329697 |
| | = | 0.8268 |
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 |
| = | (536.337 - 20.384 | - | 561.954) | / | 3729.182 |
| | = | -0.012335 |
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.
Watsco has a M-score of -2.39 suggests that the company is unlikely to be a manipulator.
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