Krka d.d. (WAR:KRK) Beneish M-Score : -2.77 (As of Jun. 13, 2024)

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What is Krka d.d. Beneish M-Score?

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 -2.77 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Krka d.d.'s Beneish M-Score or its related term are showing as below:

WAR:KRK' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12 Med: -2.68 Max: -1.73
Current: -2.77

During the past 13 years, the highest Beneish M-Score of Krka d.d. was -1.73. The lowest was -3.12. And the median was -2.68.

Krka d.d. Beneish M-Score Historical Data

The historical data trend for Krka d.d.'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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Krka d.d. Beneish M-Score Chart

Krka d.d. Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Beneish M-Score

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-2.83

-2.68

-2.63

-2.08

-2.89

Krka d.d. Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23
Beneish M-Score	Get a 7-Day Free Trial															-2.37	-2.89	-2.82	-3.12	-2.77

Competitive Comparison of Krka d.d.'s Beneish M-Score

For the Drug Manufacturers - Specialty & Generic subindustry, Krka d.d.'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.

Krka d.d.'s Beneish M-Score Distribution in the Drug Manufacturers Industry

For the Drug Manufacturers industry and Healthcare sector, Krka d.d.'s Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Krka d.d.'s Beneish M-Score falls into.

Krka d.d. 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 Krka d.d. for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.7433

0.528 * 0.9481

0.404 * 0.7625

0.892 * 1.1127

0.115 * 1.045

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9098

4.679 * -0.003462

0.327 * 0.9491

-2.72

This Year (Sep23) TTM:

Last Year (Sep22) TTM:

Total Receivables was zł2,111 Mil.
Revenue was 1814.548 + 2026.845 + 1985.373 + 2037.508 = zł7,864 Mil.
Gross Profit was 982.563 + 1158.182 + 1211.523 + 1257.278 = zł4,610 Mil.
Total Current Assets was zł6,980 Mil.
Total Assets was zł11,455 Mil.
Property, Plant and Equipment(Net PPE) was zł3,299 Mil.
Depreciation, Depletion and Amortization(DDA) was zł456 Mil.
Selling, General, & Admin. Expense(SGA) was zł1,898 Mil.
Total Current Liabilities was zł1,741 Mil.
Long-Term Debt & Capital Lease Obligation was zł30 Mil.
Net Income was 281.944 + 354.904 + 385.718 + 267.313 = zł1,290 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = zł0 Mil.
Cash Flow from Operations was 313.095 + 379.09 + 115.144 + 522.202 = zł1,330 Mil.

Total Receivables was zł2,552 Mil.
Revenue was 1541.763 + 1818.115 + 1927.601 + 1780.059 = zł7,068 Mil.
Gross Profit was 991.531 + 786.203 + 1113.928 + 1035.823 = zł3,927 Mil.
Total Current Assets was zł6,233 Mil.
Total Assets was zł10,914 Mil.
Property, Plant and Equipment(Net PPE) was zł3,212 Mil.
Depreciation, Depletion and Amortization(DDA) was zł467 Mil.
Selling, General, & Admin. Expense(SGA) was zł1,874 Mil.
Total Current Liabilities was zł1,746 Mil.
Long-Term Debt & Capital Lease Obligation was zł32 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)
	=	(2110.819 / 7864.274)	/	(2552.039 / 7067.538)
	=	0.268406	/	0.361093
	=	0.7433

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)
	=	(3927.485 / 7067.538)	/	(4609.546 / 7864.274)
	=	0.555708	/	0.586138
	=	0.9481

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 - (6980.268 + 3299.056) / 11454.643)	/	(1 - (6232.672 + 3212.478) / 10913.704)
	=	0.102606	/	0.134561
	=	0.7625

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
	=	7864.274	/	7067.538
	=	1.1127

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))
	=	(466.683 / (466.683 + 3212.478))	/	(455.753 / (455.753 + 3299.056))
	=	0.126845	/	0.121378
	=	1.045

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)
	=	(1897.566 / 7864.274)	/	(1874.445 / 7067.538)
	=	0.241289	/	0.265219
	=	0.9098

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)
	=	((29.932 + 1741.051) / 11454.643)	/	((31.552 + 1746.232) / 10913.704)
	=	0.154608	/	0.162895
	=	0.9491

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
	=	(1289.879 - 0	-	1329.531)	/	11454.643
	=	-0.003462

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.

Krka d.d. has a M-score of -2.72 suggests that the company is unlikely to be a manipulator.

Krka d.d. Beneish M-Score Related Terms

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Krka d.d. (WAR:KRK) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Krka d.d. (WAR:KRK) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

KRKG:Slovenia 0HLK:UK

Address

Smarjeska Cesta 6, Novo Mesto, SVN, 8501

Website

https://www.krka.biz

Krka d.d. engages in the development, production, marketing, and sales of human health products (prescription pharmaceuticals and non-prescription products), animal health products, health resort, and tourist services. The company products in Prescription pharmaceuticals include Cardiovascular diseases, Infections, Oncology; Non-prescription products include Cold and cough products, nasal products, vitamin and minerals, hair care products; and Animal health products include Antimicrobials, Disinfectants, among others. It operates across the European Union, South-East Europe, East Europe region, and Others. The company derives a majority of revenue from the European Union.

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