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Home Inns & Hotels Management Inc (NAS:HMIN)
Beneish M-Score
-3.04 (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.

Home Inns & Hotels Management Inc has a M-score of -3.04 suggests that the company is not a manipulator.

HMIN' s 10-Year Beneish M-Score Range
Min: -9.96   Max: -1.32
Current: -3.04

-9.96
-1.32

During the past 12 years, the highest Beneish M-Score of Home Inns & Hotels Management Inc was -1.32. The lowest was -9.96. And the median was -2.03.


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 Home Inns & Hotels Management 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 * 0.8337+0.528 * 0.7928+0.404 * 0.9378+0.892 * 1.0846+0.115 * 0.9151
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0752+4.679 * -0.0889-0.327 * 0.7101
=-3.04

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $19.8 Mil.
Revenue was 257.181994192 + 221.396626506 + 249.742687159 + 267.574963133 = $995.9 Mil.
Gross Profit was 51.626976444 + 20.5524497992 + 38.5602379772 + 55.1397673275 = $165.9 Mil.
Total Current Assets was $312.4 Mil.
Total Assets was $1,624.3 Mil.
Property, Plant and Equipment(Net PPE) was $662.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $118.1 Mil.
Selling, General & Admin. Expense(SGA) was $73.0 Mil.
Total Current Liabilities was $319.4 Mil.
Long-Term Debt was $116.1 Mil.
Net Income was 17.4517586318 + 12.0265060241 + 2.12411171707 + 17.6967065378 = $49.3 Mil.
Non Operating Income was -3.49628912552 + 11.2517269076 + -6.09915716411 + -5.01327216123 = $-3.4 Mil.
Cash Flow from Operations was 0 + 0 + 197.036688151 + 0 = $197.0 Mil.
Accounts Receivable was $21.9 Mil.
Revenue was 244.97424193 + 212.459586162 + 221.075699132 + 239.726488903 = $918.2 Mil.
Gross Profit was 44.4819041409 + 15.2258325251 + 22.8405657345 + 38.7108414498 = $121.3 Mil.
Total Current Assets was $208.1 Mil.
Total Assets was $1,468.1 Mil.
Property, Plant and Equipment(Net PPE) was $634.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $101.9 Mil.
Selling, General & Admin. Expense(SGA) was $62.6 Mil.
Total Current Liabilities was $266.3 Mil.
Long-Term Debt was $288.1 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)
=(19.8262342691 / 995.89627099) / (21.9254972286 / 918.236016128)
=0.01990793 / 0.02387784
=0.8337

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)
=(20.5524497992 / 918.236016128) / (51.626976444 / 995.89627099)
=0.13205662 / 0.16656296
=0.7928

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 - (312.393352694 + 662.384640207) / 1624.28670539) / (1 - (208.109064232 + 633.992174764) / 1468.11493316)
=0.39987319 / 0.42640646
=0.9378

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
=995.89627099 / 918.236016128
=1.0846

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))
=(101.8731919 / (101.8731919 + 633.992174764)) / (118.07668154 / (118.07668154 + 662.384640207))
=0.13843999 / 0.15129088
=0.9151

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)
=(73.0359888553 / 995.89627099) / (62.6286581496 / 918.236016128)
=0.07333694 / 0.0682054
=1.0752

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)
=((116.146821555 + 319.435785737) / 1624.28670539) / ((288.070916205 + 266.345940659) / 1468.11493316)
=0.26816855 / 0.37763859
=0.7101

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
=(49.2990829108 - -3.35699154323 - 197.036688151) / 1624.28670539
=-0.0889

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.

Home Inns & Hotels Management Inc has a M-score of -3.04 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 own currency.

Home Inns & Hotels Management Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.40341.1740.73381.01981.14041.72770.77891.1041
GMI 1.81761.14581.5970.80210.72861.39281.27770.7788
AQI 0.37143.1291.03061.02860.65943.56281.09170.9343
SGI 2.1321.84491.96121.38941.26151.30181.4821.1317
DEPI 0.88581.30190.76280.71120.99061.23630.75470.9432
SGAI 0.46790.90890.81730.84550.88191.34540.93151.0203
LVGI 0.66611.91980.84960.59010.70292.00320.83080.9382
TATA -0.0859-0.0376-0.0905-0.1383-0.0925-0.0648-0.0806-0.0956
M-score -1.14-1.06-1.91-2.73-2.71-0.96-2.41-2.85

Home Inns & Hotels Management Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.4031.25381.09580.72070.74170.69510.91270.8337
GMI 1.48991.60421.64961.40611.12080.90090.78770.7928
AQI 3.56132.77980.9441.08261.00890.97140.93430.9378
SGI 1.34551.50041.66251.9131.6821.47771.13171.0846
DEPI 1.21531.14551.12170.75720.76010.72140.94320.9151
SGAI 1.27731.12280.6920.64090.69830.91190.92821.0752
LVGI 2.35561.5780.85460.79491.28971.28480.87680.7101
TATA -0.0749-0.0867-0.0792-0.0748-0.0639-0.0529-0.0958-0.0889
M-score -1.32-1.36-1.74-1.92-2.41-2.76-2.98-3.04
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