Victory Securities (Holdings) Co (HKSE:08540) Beneish M-Score : -3.65 (As of Jun. 25, 2024)

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What is Victory Securities (Holdings) Co 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.

Good Sign:

Beneish M-Score -3.65 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Victory Securities (Holdings) Co's Beneish M-Score or its related term are showing as below:

HKSE:08540' s Beneish M-Score Range Over the Past 10 Years
Min: -4.34 Med: -2.34 Max: -1.65
Current: -3.65

During the past 8 years, the highest Beneish M-Score of Victory Securities (Holdings) Co was -1.65. The lowest was -4.34. And the median was -2.34.

Victory Securities (Holdings) Co 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 Victory Securities (Holdings) Co 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 * 1

0.528 * 1

0.404 * 0.9687

0.892 * 0.7512

0.115 * 1.0028

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1

4.679 * -0.209081

0.327 * 0.8778

-3.65

* 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 (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was HK$0.00 Mil.
Revenue was HK$45.15 Mil.
Gross Profit was HK$45.15 Mil.
Total Current Assets was HK$0.00 Mil.
Total Assets was HK$300.75 Mil.
Property, Plant and Equipment(Net PPE) was HK$53.77 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$5.22 Mil.
Selling, General, & Admin. Expense(SGA) was HK$0.00 Mil.
Total Current Liabilities was HK$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was HK$96.20 Mil.
Net Income was HK$-24.97 Mil.
Gross Profit was HK$0.00 Mil.
Cash Flow from Operations was HK$37.91 Mil.

Total Receivables was HK$0.00 Mil.
Revenue was HK$60.11 Mil.
Gross Profit was HK$60.11 Mil.
Total Current Assets was HK$0.00 Mil.
Total Assets was HK$365.42 Mil.
Property, Plant and Equipment(Net PPE) was HK$55.65 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$5.42 Mil.
Selling, General, & Admin. Expense(SGA) was HK$0.00 Mil.
Total Current Liabilities was HK$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was HK$133.16 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 / 45.148)	/	(0 / 60.105)
	=	0	/	0
	=	1

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)
	=	(60.105 / 60.105)	/	(45.148 / 45.148)
	=	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 + 53.769) / 300.754)	/	(1 - (0 + 55.645) / 365.421)
	=	0.821219	/	0.847724
	=	0.9687

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
	=	45.148	/	60.105
	=	0.7512

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))
	=	(5.422 / (5.422 + 55.645))	/	(5.223 / (5.223 + 53.769))
	=	0.088788	/	0.088537
	=	1.0028

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 / 45.148)	/	(0 / 60.105)
	=	0	/	0
	=	1

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)
	=	((96.195 + 0) / 300.754)	/	((133.157 + 0) / 365.421)
	=	0.319846	/	0.364393
	=	0.8778

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
	=	(-24.97 - 0	-	37.912)	/	300.754
	=	-0.209081

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.

Victory Securities (Holdings) Co has a M-score of -3.65 suggests that the company is unlikely to be a manipulator.

Victory Securities (Holdings) Co Beneish M-Score Related Terms

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Victory Securities (Holdings) Co (HKSE:08540) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » Victory Securities (Holdings) Co Ltd (HKSE:08540) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

3 Connaught Road West, Room 1101-3, 11th Floor, Yardley Commercial Building, Sheung Wan, Hong Kong, HKG

Website

https://www.victorysec.com.hk

Victory Securities (Holdings) Co Ltd is an investment holding company engaged in the businesses of securities futures insurance policies broking, placing and underwriting services and advising on securities services, financing services, asset management services, financial advisory services and investment consultancy services in Hong Kong.. The company has five operating segments: Securities/ futures broking services; Financing services; Asset management services; Insurance consultancy services and Financial advisory services. It generates maximum revenue from the Securities/ futures broking services segment. The Group operates in Hong Kong and its revenue is derived from its operations in Hong Kong.

Executives

Chui Fan	2101 Beneficial owner
Kou Kuen	2101 Beneficial owner
Dr. Tt Kou's Family Company Limited	2101 Beneficial owner
Chan Pui Chuen	2101 Beneficial owner
Chan Ying Kit	2202 Interest of your spouse
Kou Luen	2101 Beneficial owner