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Cummins India (BOM:500480) Beneish M-Score : -1.88 (As of Jun. 22, 2024)


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What is Cummins India 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 -1.88 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

BOM:500480' s Beneish M-Score Range Over the Past 10 Years
Min: -2.49   Med: -2.3   Max: -1.88
Current: -1.88

During the past 13 years, the highest Beneish M-Score of Cummins India was -1.88. The lowest was -2.49. And the median was -2.30.


Cummins India Beneish M-Score Historical Data

The historical data trend for Cummins India'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.

* Premium members only.

Cummins India Beneish M-Score Chart

Cummins India Annual Data
Trend Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.38 -2.49 -2.21 -2.17 -1.88

Cummins India 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 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.17 - - - -1.88

Competitive Comparison of Cummins India's Beneish M-Score

For the Specialty Industrial Machinery subindustry, Cummins India'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.


Cummins India's Beneish M-Score Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Cummins India's Beneish M-Score distribution charts can be found below:

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



Cummins India 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 Cummins India 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 * 1.1234+0.528 * 0.9079+0.404 * 0.9531+0.892 * 1.1595+0.115 * 0.9563
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0+4.679 * 0.048519-0.327 * 0.9596
=-1.88

* 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 ₹20,854 Mil.
Revenue was ₹88,600 Mil.
Gross Profit was ₹30,891 Mil.
Total Current Assets was ₹59,422 Mil.
Total Assets was ₹89,705 Mil.
Property, Plant and Equipment(Net PPE) was ₹12,901 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹1,592 Mil.
Selling, General, & Admin. Expense(SGA) was ₹0 Mil.
Total Current Liabilities was ₹20,569 Mil.
Long-Term Debt & Capital Lease Obligation was ₹199 Mil.
Net Income was ₹17,206 Mil.
Gross Profit was ₹0 Mil.
Cash Flow from Operations was ₹12,853 Mil.
Total Receivables was ₹16,009 Mil.
Revenue was ₹76,414 Mil.
Gross Profit was ₹24,189 Mil.
Total Current Assets was ₹50,985 Mil.
Total Assets was ₹79,186 Mil.
Property, Plant and Equipment(Net PPE) was ₹12,103 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹1,420 Mil.
Selling, General, & Admin. Expense(SGA) was ₹311 Mil.
Total Current Liabilities was ₹18,904 Mil.
Long-Term Debt & Capital Lease Obligation was ₹201 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)
=(20853.5 / 88599.9) / (16009.3 / 76414)
=0.235367 / 0.209507
=1.1234

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)
=(24188.8 / 76414) / (30890.7 / 88599.9)
=0.316549 / 0.348654
=0.9079

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 - (59422 + 12901) / 89705.1) / (1 - (50984.7 + 12102.6) / 79186.4)
=0.193769 / 0.203306
=0.9531

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
=88599.9 / 76414
=1.1595

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))
=(1420.4 / (1420.4 + 12102.6)) / (1591.8 / (1591.8 + 12901))
=0.105036 / 0.109834
=0.9563

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)
=(0 / 88599.9) / (310.8 / 76414)
=0 / 0.004067
=0

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)
=((198.5 + 20569.3) / 89705.1) / ((200.7 + 18903.5) / 79186.4)
=0.231512 / 0.241256
=0.9596

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
=(17205.8 - 0 - 12853.4) / 89705.1
=0.048519

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.

Cummins India has a M-score of -1.88 suggests that the company is unlikely to be a manipulator.


Cummins India Beneish M-Score Related Terms

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Cummins India (BOM:500480) Business Description

Traded in Other Exchanges
Address
Cummins India Office Campus, Tower A, 5th Floor, Survey No. 21, Balewadi, Pune, MH, IND, 411045
Cummins India Ltd is a group of businesses that design and manufacture service engines and related technologies. The company produces fuel systems, air handling, filtration, emission solutions, and electrical power generation systems in facilities across India. It has three business units: Engine Business, Power Systems Business, and Distribution Business. Its engines power a wide range of systems, including trucks, construction equipment, military components, railways, mining, and power generation applications. In addition, Cummins India provides aftermarket support and expertise to customers in different regions. The revenue is derived from India, but the company exports products to North America, Europe, and other Asian countries.

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