James Hardie Industries (ASX:JHX) Beneish M-Score : -2.82 (As of Dec. 14, 2024)

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What is James Hardie Industries 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 -2.82 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for James Hardie Industries's Beneish M-Score or its related term are showing as below:

ASX:JHX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12 Med: -2.55 Max: -1.65
Current: -2.82

During the past 13 years, the highest Beneish M-Score of James Hardie Industries was -1.65. The lowest was -3.12. And the median was -2.55.

James Hardie Industries Beneish M-Score Historical Data

The historical data trend for James Hardie Industries'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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James Hardie Industries Beneish M-Score Chart

James Hardie Industries Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

Beneish M-Score

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-2.12

-3.12

-2.45

-2.56

-2.82

James Hardie Industries Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.74	-2.86	-2.82	-2.76	-2.82

Competitive Comparison of James Hardie Industries's Beneish M-Score

For the Building Materials subindustry, James Hardie Industries'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.

James Hardie Industries's Beneish M-Score Distribution in the Building Materials Industry

For the Building Materials industry and Basic Materials sector, James Hardie Industries's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where James Hardie Industries's Beneish M-Score falls into.

James Hardie Industries 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 James Hardie Industries 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 * 0.8742

0.528 * 0.9324

0.404 * 0.8708

0.892 * 1.0498

0.115 * 0.993

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1096

4.679 * -0.033742

0.327 * 1.0078

-2.82

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was A$520 Mil.
Revenue was 1419.102 + 1493.801 + 1532.473 + 1461.58 = A$5,907 Mil.
Gross Profit was 550.773 + 597.731 + 626.318 + 598.646 = A$2,373 Mil.
Total Current Assets was A$2,143 Mil.
Total Assets was A$7,346 Mil.
Property, Plant and Equipment(Net PPE) was A$3,229 Mil.
Depreciation, Depletion and Amortization(DDA) was A$294 Mil.
Selling, General, & Admin. Expense(SGA) was A$931 Mil.
Total Current Liabilities was A$1,062 Mil.
Long-Term Debt & Capital Lease Obligation was A$1,762 Mil.
Net Income was 123.182 + 233.882 + 84.79 + 216.779 = A$659 Mil.
Non Operating Income was -85.518 + -0.151 + -225.853 + -10.458 = A$-322 Mil.
Cash Flow from Operations was 264.678 + 278.761 + 251.168 + 433.858 = A$1,228 Mil.

Total Receivables was A$567 Mil.
Revenue was 1554.133 + 1421.907 + 1374.864 + 1275.706 = A$5,627 Mil.
Gross Profit was 628.002 + 556.366 + 494.34 + 429.187 = A$2,108 Mil.
Total Current Assets was A$1,793 Mil.
Total Assets was A$6,925 Mil.
Property, Plant and Equipment(Net PPE) was A$2,996 Mil.
Depreciation, Depletion and Amortization(DDA) was A$271 Mil.
Selling, General, & Admin. Expense(SGA) was A$799 Mil.
Total Current Liabilities was A$1,057 Mil.
Long-Term Debt & Capital Lease Obligation was A$1,585 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)
	=	(520.347 / 5906.956)	/	(567.006 / 5626.61)
	=	0.088091	/	0.100772
	=	0.8742

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)
	=	(2107.895 / 5626.61)	/	(2373.468 / 5906.956)
	=	0.37463	/	0.401809
	=	0.9324

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 - (2142.979 + 3229.313) / 7345.564)	/	(1 - (1793.134 + 2995.611) / 6925.134)
	=	0.268635	/	0.308498
	=	0.8708

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
	=	5906.956	/	5626.61
	=	1.0498

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))
	=	(271.074 / (271.074 + 2995.611))	/	(294.485 / (294.485 + 3229.313))
	=	0.082981	/	0.08357
	=	0.993

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)
	=	(930.918 / 5906.956)	/	(799.181 / 5626.61)
	=	0.157597	/	0.142036
	=	1.1096

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)
	=	((1761.766 + 1062.111) / 7345.564)	/	((1584.786 + 1056.835) / 6925.134)
	=	0.384433	/	0.381454
	=	1.0078

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
	=	(658.633 - -321.98	-	1228.465)	/	7345.564
	=	-0.033742

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.

James Hardie Industries has a M-score of -2.82 suggests that the company is unlikely to be a manipulator.

James Hardie Industries Beneish M-Score Related Terms

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James Hardie Industries Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » James Hardie Industries PLC (ASX:JHX) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

JHIUF:USA JHX:USA JHA0:Germany

Address

Upper Hatch Street, 1st Floor, Block A, One Park Place, Dublin, IRL, D02 FD79

Website

https://www.jameshardie.com

James Hardie is a manufacturer of fiber cement-based building products, selling primarily to the residential construction industry. North America is the primary geography, generating about 80% of group earnings. Here, it is the largest manufacturer of fiber cement, which is mainly used for exterior siding on houses. Businesses in Australia, New Zealand, and Europe, make up the rest of earnings.