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.
Watsco Beneish M-Score Chart
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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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Dec19 |
Mar20 |
Jun20 |
Sep20 |
Dec20 |
Mar21 |
Jun21 |
Sep21 |
Dec21 |
Mar22 |
Jun22 |
Sep22 |
Dec22 |
Mar23 |
Jun23 |
Sep23 |
Dec23 |
Mar24 |
Jun24 |
Sep24 |
| Beneish M-Score |
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-2.27 |
-2.39 |
-2.63 |
-2.69 |
-2.66 |
Competitive Comparison of Watsco's Beneish M-Score
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's Beneish M-Score Distribution in the Industrial Distribution Industry
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 * 0.9675 | + | 0.528 * 1.0388 | + | 0.404 * 0.929 | + | 0.892 * 1.0283 | + | 0.115 * 0.9213 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0162 | + | 4.679 * -0.043107 | - | 0.327 * 0.8665 |
| = | -2.66 |
* 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 (Sep24) TTM: | Last Year (Sep23) TTM: |
Total Receivables was $945 Mil.
Revenue was 2160.036 + 2139.328 + 1564.991 + 1603.197 = $7,468 Mil.
Gross Profit was 566.244 + 579.76 + 430.625 + 414.416 = $1,991 Mil.
Total Current Assets was $3,133 Mil.
Total Assets was $4,517 Mil.
Property, Plant and Equipment(Net PPE) was $541 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General, & Admin. Expense(SGA) was $1,267 Mil.
Total Current Liabilities was $933 Mil.
Long-Term Debt & Capital Lease Obligation was $305 Mil.
Net Income was 171.031 + 181.41 + 87.004 + 82.547 = $522 Mil.
Non Operating Income was 10.376 + 8.072 + 5.46 + 0 = $24 Mil.
Cash Flow from Operations was 232.764 + 57.735 + 103.706 + 298.614 = $693 Mil.
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Total Receivables was $949 Mil.
Revenue was 2126.845 + 2003.084 + 1550.641 + 1581.223 = $7,262 Mil.
Gross Profit was 566.945 + 562.622 + 448.157 + 433.55 = $2,011 Mil.
Total Current Assets was $2,731 Mil.
Total Assets was $4,039 Mil.
Property, Plant and Equipment(Net PPE) was $497 Mil.
Depreciation, Depletion and Amortization(DDA) was $34 Mil.
Selling, General, & Admin. Expense(SGA) was $1,213 Mil.
Total Current Liabilities was $888 Mil.
Long-Term Debt & Capital Lease Obligation was $390 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) |
| = | (944.501 / 7467.552) | / | (949.317 / 7261.793) |
| = | 0.126481 | / | 0.130728 |
| | = | 0.9675 |
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) |
| = | (2011.274 / 7261.793) | / | (1991.045 / 7467.552) |
| = | 0.276967 | / | 0.266626 |
| | = | 1.0388 |
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 - (3132.992 + 541.317) / 4517.476) | / | (1 - (2730.572 + 496.977) / 4039.067) |
| = | 0.186646 | / | 0.200917 |
| | = | 0.929 |
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 |
| = | 7467.552 | / | 7261.793 |
| | = | 1.0283 |
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)) |
| = | (33.649 / (33.649 + 496.977)) | / | (40.015 / (40.015 + 541.317)) |
| = | 0.063414 | / | 0.068833 |
| | = | 0.9213 |
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) |
| = | (1267.411 / 7467.552) | / | (1212.799 / 7261.793) |
| = | 0.169722 | / | 0.167011 |
| | = | 1.0162 |
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) |
| = | ((305.412 + 933.149) / 4517.476) | / | ((390.339 + 887.628) / 4039.067) |
| = | 0.274171 | / | 0.316402 |
| | = | 0.8665 |
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 |
| = | (521.992 - 23.908 | - | 692.819) | / | 4517.476 |
| | = | -0.043107 |
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 -2.66 suggests that the company is unlikely to be a manipulator.
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