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Homeinns Hotel Group (NAS:HMIN)
Beneish M-Score
-2.67 (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.

Homeinns Hotel Group has a M-score of -2.67 suggests that the company is not a manipulator.

HMIN' s 10-Year Beneish M-Score Range
Min: -2.97   Max: -1.49
Current: -2.67

-2.97
-1.49

During the past 13 years, the highest Beneish M-Score of Homeinns Hotel Group was -1.49. The lowest was -2.97. And the median was -1.95.


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 Homeinns Hotel Group 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 * 1.0763+0.528 * 0.8437+0.404 * 1.0597+0.892 * 1.0756+0.115 * 0.8991
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0421+4.679 * -0.0899-0.327 * 0.4936
=-2.67

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $20 Mil.
Revenue was 287.452673422 + 255.836356049 + 223.261623198 + 248.797003622 = $1,015 Mil.
Gross Profit was 64.7067544231 + 51.3568516676 + 20.7255791349 + 38.4142245637 = $175 Mil.
Total Current Assets was $201 Mil.
Total Assets was $1,509 Mil.
Property, Plant and Equipment(Net PPE) was $655 Mil.
Depreciation, Depletion and Amortization(DDA) was $118 Mil.
Selling, General & Admin. Expense(SGA) was $73 Mil.
Total Current Liabilities was $285 Mil.
Long-Term Debt was $0 Mil.
Net Income was 39.9973933726 + 17.360446827 + 12.1278146768 + 2.11606848864 = $72 Mil.
Non Operating Income was 9.15186862598 + -3.47799569865 + 11.3465089908 + -6.07606190319 = $11 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 196.290582812 = $196 Mil.
Accounts Receivable was $17 Mil.
Revenue was 266.831699346 + 244.97424193 + 211.468222043 + 220.685544682 = $944 Mil.
Gross Profit was 54.9866013072 + 44.4819041409 + 15.1547868061 + 22.8002566982 = $137 Mil.
Total Current Assets was $265 Mil.
Total Assets was $1,532 Mil.
Property, Plant and Equipment(Net PPE) was $641 Mil.
Depreciation, Depletion and Amortization(DDA) was $102 Mil.
Selling, General & Admin. Expense(SGA) was $65 Mil.
Total Current Liabilities was $290 Mil.
Long-Term Debt was $297 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)
=(19.8551692679 / 1015.34765629) / (17.1506535948 / 943.959708002)
=0.01955505 / 0.01816884
=1.0763

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)
=(51.3568516676 / 943.959708002) / (64.7067544231 / 1015.34765629)
=0.14558201 / 0.17255509
=0.8437

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 - (200.507477762 + 654.816069858) / 1508.72128637) / (1 - (265.029738562 + 641.024183007) / 1532.29035948)
=0.43308048 / 0.40869306
=1.0597

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
=1015.34765629 / 943.959708002
=1.0756

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))
=(101.693406064 / (101.693406064 + 641.024183007)) / (117.629568653 / (117.629568653 + 654.816069858))
=0.13692069 / 0.152282
=0.8991

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)
=(73.1949815283 / 1015.34765629) / (65.2969518901 / 943.959708002)
=0.07208859 / 0.06917345
=1.0421

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 + 285.265387247) / 1508.72128637) / ((296.592973856 + 290.333006536) / 1532.29035948)
=0.18907759 / 0.38303836
=0.4936

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
=(71.6017233651 - 10.9443200149 - 196.290582812) / 1508.72128637
=-0.0899

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.

Homeinns Hotel Group has a M-score of -2.67 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.

Homeinns Hotel Group Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.37291.11010.74181.09061.14041.50770.73121.10560.7658
GMI 1.81761.14581.5970.80210.72861.39281.27770.90960.9412
AQI 0.37143.1291.03061.02860.65943.56281.09170.93431.0596
SGI 2.12571.8211.99041.39291.25151.30611.48671.12941.0326
DEPI 0.88581.30190.76280.71120.99061.23630.75470.94320.9292
SGAI 0.46790.90890.81730.84550.88191.34540.93150.74390.9469
LVGI 0.66611.91980.84960.59010.70292.00320.83081.31480.7926
TATA -0.0859-0.0376-0.0905-0.1383-0.0925-0.0648-0.0806-0.0956-0.1037
M-score -1.17-1.14-1.88-2.66-2.72-1.16-2.45-2.85-3.09

Homeinns Hotel Group Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.031210.73390.74660.69980.92310.84271.07630.8984
GMI 1.65091.74581.40591.12050.90010.78710.79380.84370.9426
AQI 0.9440.9621.08261.00890.97140.93430.93781.05971.0596
SGI 1.6632.23811.91021.67671.47931.13191.08751.07561.0437
DEPI 1.11227.0690.7530.7570.72350.94320.91250.89910.9292
SGAI 0.69220.69870.6410.69870.91160.92781.0751.04210.9462
LVGI 0.85461.2540.79491.28971.28480.87680.71010.49360.7729
TATA -0.0796-0.0809-0.075-0.0638-0.053-0.0957-0.089-0.0899-0.1037
M-score -1.80-0.71-1.92-2.41-2.75-2.97-3.03-2.67-2.95
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