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GuruFocus has detected 2 Warning Signs with Hamilton Bancorp Inc $HBK.
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Hamilton Bancorp Inc (NAS:HBK)
Beneish M-Score
-2.30 (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.

Hamilton Bancorp Inc has a M-score of -2.30 suggests that the company is not a manipulator.

HBK' s Beneish M-Score Range Over the Past 10 Years
Min: -2.35   Max: -2.1
Current: -2.3

-2.35
-2.1

During the past 5 years, the highest Beneish M-Score of Hamilton Bancorp Inc was -2.10. The lowest was -2.35. And the median was -2.29.


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 Hamilton Bancorp 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 * 0.8681+0.528 * 1+0.404 * 1.0026+0.892 * 1.3904+0.115 * 0.7358
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8441+4.679 * -0.0003-0.327 * 1.1455
=-2.30

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1.48 Mil.
Revenue was 3.898 + 3.835 + 3.366 + 3.068 = $14.17 Mil.
Gross Profit was 3.898 + 3.835 + 3.366 + 3.068 = $14.17 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $499.84 Mil.
Property, Plant and Equipment(Net PPE) was $4.23 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.44 Mil.
Selling, General & Admin. Expense(SGA) was $7.28 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt was $26.19 Mil.
Net Income was 0.059 + 0.323 + -0.335 + 0.117 = $0.16 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0.367 + 0.385 + -0.964 + 0.547 = $0.34 Mil.
Accounts Receivable was $1.23 Mil.
Revenue was 2.958 + 2.376 + 2.628 + 2.227 = $10.19 Mil.
Gross Profit was 2.958 + 2.376 + 2.628 + 2.227 = $10.19 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $368.26 Mil.
Property, Plant and Equipment(Net PPE) was $4.07 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.31 Mil.
Selling, General & Admin. Expense(SGA) was $6.20 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt was $16.85 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)
=(1.481 / 14.167) / (1.227 / 10.189)
=0.10453872 / 0.12042399
=0.8681

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)
=(10.189 / 10.189) / (14.167 / 14.167)
=1 / 1
=1

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 - (0 + 4.229) / 499.835) / (1 - (0 + 4.071) / 368.257)
=0.99153921 / 0.98894522
=1.0026

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
=14.167 / 10.189
=1.3904

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))
=(0.306 / (0.306 + 4.071)) / (0.444 / (0.444 + 4.229))
=0.0699109 / 0.09501391
=0.7358

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)
=(7.28 / 14.167) / (6.203 / 10.189)
=0.51387026 / 0.6087938
=0.8441

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)
=((26.194 + 0) / 499.835) / ((16.847 + 0) / 368.257)
=0.05240529 / 0.04574794
=1.1455

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
=(0.164 - 0 - 0.335) / 499.835
=-0.0003

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.

Hamilton Bancorp Inc has a M-score of -2.30 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 local exchange's currency.

Hamilton Bancorp Inc Annual Data

Mar12Mar13Mar14Mar15Mar16
DSRI 1.1268
GMI 1
AQI 0.9977
SGI 1.2494
DEPI 1.4427
SGAI 0.8097
LVGI 1.8277
TATA -0.0038
M-score -2.35

Hamilton Bancorp Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.12681.64760.88310.8681
GMI 1111
AQI 0.99770.99821.00321.0026
SGI 1.24941.26961.40731.3904
DEPI 1.44271.59870.67390.7358
SGAI 0.80970.90340.90510.8441
LVGI 1.82772.6471.09741.1455
TATA -0.0038-0.00090.0013-0.0003
M-score -2.35-2.10-2.27-2.30
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