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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 -4.11 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
The historical rank and industry rank for Wayfair's Beneish M-Score or its related term are showing as below:
During the past 12 years, the highest Beneish M-Score of Wayfair was -0.13. The lowest was -4.64. And the median was -3.50.
The historical data trend for Wayfair'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.
Wayfair Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Beneish M-Score | Get a 7-Day Free Trial | -2.03 | -3.90 | -2.33 | -3.24 | -4.11 |
Wayfair Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
Beneish M-Score | Get a 7-Day Free Trial | -3.88 | -4.12 | -4.64 | -4.11 | -4.11 |
For the Internet Retail subindustry, Wayfair'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 Retail - Cyclical industry and Consumer Cyclical sector, Wayfair's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Wayfair'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 Wayfair 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 * 0.6265 | + | 0.528 * 0.9338 | + | 0.404 * 1.4871 | + | 0.892 * 0.9966 | + | 0.115 * 0.9624 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 0.9209 | + | 4.679 * -0.310494 | - | 0.327 * 1.01 | |||||||
= | -4.11 |
* 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 (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was $113 Mil. Revenue was 2729 + 3114 + 2944 + 3171 = $11,958 Mil. Gross Profit was 819 + 944 + 917 + 985 = $3,665 Mil. Total Current Assets was $1,588 Mil. Total Assets was $3,240 Mil. Property, Plant and Equipment(Net PPE) was $1,601 Mil. Depreciation, Depletion and Amortization(DDA) was $417 Mil. Selling, General, & Admin. Expense(SGA) was $3,751 Mil. Total Current Liabilities was $2,025 Mil. Long-Term Debt & Capital Lease Obligation was $4,000 Mil. Net Income was -248 + -174 + -163 + -46 = $-631 Mil. Non Operating Income was -83 + 3 + -4 + 102 = $18 Mil. Cash Flow from Operations was -139 + 158 + 121 + 217 = $357 Mil. |
Total Receivables was $181 Mil. Revenue was 2774 + 3101 + 2840 + 3284 = $11,999 Mil. Gross Profit was 821 + 893 + 824 + 896 = $3,434 Mil. Total Current Assets was $1,607 Mil. Total Assets was $3,212 Mil. Property, Plant and Equipment(Net PPE) was $1,571 Mil. Depreciation, Depletion and Amortization(DDA) was $390 Mil. Selling, General, & Admin. Expense(SGA) was $4,087 Mil. Total Current Liabilities was $1,909 Mil. Long-Term Debt & Capital Lease Obligation was $4,005 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) |
= | (113 / 11958) | / | (181 / 11999) | |
= | 0.00945 | / | 0.015085 | |
= | 0.6265 |
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) | |
= | (3434 / 11999) | / | (3665 / 11958) | |
= | 0.286191 | / | 0.306489 | |
= | 0.9338 |
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 - (1588 + 1601) / 3240) | / | (1 - (1607 + 1571) / 3212) | |
= | 0.015741 | / | 0.010585 | |
= | 1.4871 |
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 | |
= | 11958 | / | 11999 | |
= | 0.9966 |
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)) |
= | (390 / (390 + 1571)) | / | (417 / (417 + 1601)) | |
= | 0.198878 | / | 0.20664 | |
= | 0.9624 |
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) |
= | (3751 / 11958) | / | (4087 / 11999) | |
= | 0.313681 | / | 0.340612 | |
= | 0.9209 |
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) |
= | ((4000 + 2025) / 3240) | / | ((4005 + 1909) / 3212) | |
= | 1.859568 | / | 1.84122 | |
= | 1.01 |
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 | |
= | (-631 - 18 | - | 357) | / | 3240 | |
= | -0.310494 |
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.
Wayfair has a M-score of -4.11 suggests that the company is unlikely to be a manipulator.
Thank you for viewing the detailed overview of Wayfair's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Niraj Shah | director, 10 percent owner, officer: Chief Executive Officer | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Steven Conine | director, 10 percent owner, officer: Chief Technology Officer | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Thomas Netzer | officer: Chief Operating Officer | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Jon Blotner | officer: Chief Commercial Officer | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Kate Gulliver | officer: CFO and Chief Admin Officer | 4 COPLEY PLACE, BOSTON MA 02116 |
Fiona Tan | officer: Chief Technology Officer | 41 DISCOVERY, IRVINE CA 92618 |
Anke Schaferkordt | director | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Steve Oblak | officer: SVP and GM, Wayfair.com | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Michael D Fleisher | officer: Chief Financial Officer | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Michael W. Choe | director | C/O CHARLESBANK CAPITAL PARTNERS, 200 CLARENDON STREET, 54TH FLOOR, BOSTON MA 02109 |
James R. Miller | director | 4050 EAST COTTON CENTER BLVD. 6-68, PHOENIX AZ 85040 |
Jeremy King | director | C/O WAYFAIR LLC, 4 COPLEY PLACE, BOSTON MA 02116 |
Michael Andrew Kumin | director, 10 percent owner | C/O GREAT HILL PARTNERS, L.P., 200 CLARENDON STREET, 29TH FLOOR, BOSTON MA 02116 |
Edmond Macri | officer: SVP, Marketing and Analytics | C/O WAYFAIR INC., 4 COPLEY PLACE, BOSTON MA 02116 |
Michael E Sneed | director | JOHNSON & JOHNSON, ONE JOHNSON & JOHNSON PLAZA, NEW BRUNSWICK NJ 08933 |
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