Heritage Bankshares (Heritage Bankshares) Beneish M-Score : 0.00 (As of May. 31, 2024)

View and export this data going back to . Start your Free Trial

What is Heritage Bankshares Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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.

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

During the past 13 years, the highest Beneish M-Score of Heritage Bankshares was 0.00. The lowest was 0.00. And the median was 0.00.

Heritage Bankshares 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 Heritage Bankshares 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 * 0.4928

0.528 * 1

0.404 * 1.0061

0.892 * 1.6879

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.966

4.679 * -0.001499

0.327 * 0

-2.00

* 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 (Sep15) TTM:

Last Year (Dec12) TTM:

Total Receivables was $0.52 Mil.
Revenue was 2.477 + 2.597 + 3.415 + 10.81 = $19.30 Mil.
Gross Profit was 2.477 + 2.597 + 3.415 + 10.81 = $19.30 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $340.91 Mil.
Property, Plant and Equipment(Net PPE) was $8.74 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $8.76 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $0.00 Mil.
Net Income was 0.317 + 0.592 + 1.319 + 2.521 = $4.75 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0 + 2.759 + 0 + 2.501 = $5.26 Mil.

Total Receivables was $0.62 Mil.
Revenue was 2.639 + 2.978 + 2.854 + 2.963 = $11.43 Mil.
Gross Profit was 2.639 + 2.978 + 2.854 + 2.963 = $11.43 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $336.62 Mil.
Property, Plant and Equipment(Net PPE) was $10.60 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.60 Mil.
Selling, General, & Admin. Expense(SGA) was $5.37 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $0.47 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)
	=	(0.519 / 19.299)	/	(0.624 / 11.434)
	=	0.026893	/	0.054574
	=	0.4928

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)
	=	(11.434 / 11.434)	/	(19.299 / 19.299)
	=	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 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 - (0 + 8.735) / 340.909)	/	(1 - (0 + 10.602) / 336.618)
	=	0.974377	/	0.968504
	=	1.0061

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
	=	19.299	/	11.434
	=	1.6879

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))
	=	(0.603 / (0.603 + 10.602))	/	(0 / (0 + 8.735))
	=	0.053815	/	0
	=	1

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)
	=	(8.756 / 19.299)	/	(5.37 / 11.434)
	=	0.453702	/	0.469652
	=	0.966

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)
	=	((0 + 0) / 340.909)	/	((0.465 + 0) / 336.618)
	=	0	/	0.001381
	=	0

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
	=	(4.749 - 0	-	5.26)	/	340.909
	=	-0.001499

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.

Heritage Bankshares has a M-score of -2.00 suggests that the company is unlikely to be a manipulator.

Heritage Bankshares Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Heritage Bankshares's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.

Heritage Bankshares (Heritage Bankshares) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Heritage Bankshares Inc (OTCPK:HBKS) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.heritagenorfolk.com

Heritage Bankshares Inc is a bank holding company incorporated under the laws of the Commonwealth of Virginia in 1983. It serves as the holding company for its wholly-owned subsidiary, Heritage Bank. The Company, through the Bank, engages in a general community and commercial banking business, targeting the banking needs of individuals and small to medium sized businesses in its main service area which includes Chesapeake, Norfolk, and Virginia Beach, Virginia. The main business of the company is to attract deposits and to lend or invest those deposits on profitable terms. These deposits are in varied forms of both demand and time accounts including checking accounts, interest checking, money market accounts, savings accounts, certificates of deposit, and IRA accounts. The Company is involved in the construction and real estate lending market and actively extends both consumer and commercial credit. Loans consist of varying terms and might be secured or unsecured. Loans to individuals are for personal, household, and family purposes. Loans to businesses are made for purposes such as working capital, plant expansion, and equipment purchases. The banking business in the MSA, and the Company's main market area, is highly competitive, and the Company faces competition both in making loans and in attracting deposits. Bank holding companies and banks are regulated under both federal and state law.

Executives

Meredith Peter M Jr

director

MEREDITH CONSTRUCTION CO., INC., PO BOX 11265, NORFOLK VA 23517-0265