London Finance & Investment Group (JSE:LNF) Beneish M-Score : -0.49 (As of Mar. 13, 2025)

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What is London Finance & Investment Group 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.

Warning Sign:

Beneish M-Score -0.49 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for London Finance & Investment Group's Beneish M-Score or its related term are showing as below:

JSE:LNF' s Beneish M-Score Range Over the Past 10 Years
Min: -9.56 Med: -0.78 Max: 36.1
Current: -0.49

During the past 13 years, the highest Beneish M-Score of London Finance & Investment Group was 36.10. The lowest was -9.56. And the median was -0.78.

London Finance & Investment Group 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 London Finance & Investment Group 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 * 1.0009

0.892 * 1.8197

0.115 * 0.9412

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.4674

4.679 * 0.178419

0.327 * 0

-0.50

* 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 (Jun24) TTM:

Last Year (Jun23) TTM:

Total Receivables was R0.00 Mil.
Revenue was R111.94 Mil.
Gross Profit was R111.94 Mil.
Total Current Assets was R0.00 Mil.
Total Assets was R554.30 Mil.
Property, Plant and Equipment(Net PPE) was R0.07 Mil.
Depreciation, Depletion and Amortization(DDA) was R0.35 Mil.
Selling, General, & Admin. Expense(SGA) was R9.97 Mil.
Total Current Liabilities was R0.00 Mil.
Long-Term Debt & Capital Lease Obligation was R0.00 Mil.
Net Income was R99.27 Mil.
Gross Profit was R0.00 Mil.
Cash Flow from Operations was R0.38 Mil.

Total Receivables was R0.00 Mil.
Revenue was R61.51 Mil.
Gross Profit was R61.51 Mil.
Total Current Assets was R0.00 Mil.
Total Assets was R473.92 Mil.
Property, Plant and Equipment(Net PPE) was R0.47 Mil.
Depreciation, Depletion and Amortization(DDA) was R1.73 Mil.
Selling, General, & Admin. Expense(SGA) was R11.72 Mil.
Total Current Liabilities was R0.00 Mil.
Long-Term Debt & Capital Lease Obligation was R0.78 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 / 111.935)	/	(0 / 61.512)
	=	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)
	=	(61.512 / 61.512)	/	(111.935 / 111.935)
	=	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 + 0.07) / 554.303)	/	(1 - (0 + 0.473) / 473.922)
	=	0.999874	/	0.999002
	=	1.0009

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
	=	111.935	/	61.512
	=	1.8197

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))
	=	(1.728 / (1.728 + 0.473))	/	(0.352 / (0.352 + 0.07))
	=	0.785098	/	0.834123
	=	0.9412

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)
	=	(9.965 / 111.935)	/	(11.716 / 61.512)
	=	0.089025	/	0.190467
	=	0.4674

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) / 554.303)	/	((0.781 + 0) / 473.922)
	=	0	/	0.001648
	=	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
	=	(99.273 - 0	-	0.375)	/	554.303
	=	0.178419

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.

London Finance & Investment Group has a M-score of -0.50 signals that the company is likely to be a manipulator.

London Finance & Investment Group Beneish M-Score Related Terms

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London Finance & Investment Group Business Description

Industry

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LFI:UK

Address

25 Southampton Buildings, Suite 1.01, Central Court, London, GBR, WC2A 1AL

Website

http://www.city-group.com

London Finance & Investment Group PLC is an investment finance and management company. Its investment objective is to generate growth in shareholder value in real terms over the medium to long term whilst maintaining a progressive dividend policy. The company's portfolio includes companies in the FTSE Eurofirst 300 and S&P 500 indices. It also holds investments in United Kingdom listed companies. The company operates through two classes of business, Investment Operations, which derives maximum revenue, and Management Services.