Lotte Chemical Pakistan (KAR:LOTCHEM) Beneish M-Score : -2.09 (As of May. 21, 2024)

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What is Lotte Chemical Pakistan 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 -2.09 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

KAR:LOTCHEM' s Beneish M-Score Range Over the Past 10 Years
Min: -6 Med: -2.31 Max: 1.27
Current: -2.09

During the past 13 years, the highest Beneish M-Score of Lotte Chemical Pakistan was 1.27. The lowest was -6.00. And the median was -2.31.

Lotte Chemical Pakistan Beneish M-Score Historical Data

The historical data trend for Lotte Chemical Pakistan'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.

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Lotte Chemical Pakistan Beneish M-Score Chart

Lotte Chemical Pakistan Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-3.66

-2.72

-2.37

-1.34

-0.94

Lotte Chemical Pakistan 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															-0.35	-1.74	-2.31	-0.94	-2.09

Competitive Comparison of Lotte Chemical Pakistan's Beneish M-Score

For the Specialty Chemicals subindustry, Lotte Chemical Pakistan'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.

Lotte Chemical Pakistan's Beneish M-Score Distribution in the Chemicals Industry

For the Chemicals industry and Basic Materials sector, Lotte Chemical Pakistan's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Lotte Chemical Pakistan's Beneish M-Score falls into.

Lotte Chemical Pakistan 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 Lotte Chemical Pakistan 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 * 0.9975

0.528 * 2.192

0.404 * 1.1788

0.892 * 0.8994

0.115 * 0.8568

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.3394

4.679 * -0.02143

0.327 * 1.1382

-2.09

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was ₨12,223 Mil.
Revenue was 32276.924 + 19484.084 + 23592.757 + 16429.866 = ₨91,784 Mil.
Gross Profit was 1683.981 + 388.44 + 3416.933 + 2000.212 = ₨7,490 Mil.
Total Current Assets was ₨38,990 Mil.
Total Assets was ₨47,332 Mil.
Property, Plant and Equipment(Net PPE) was ₨5,887 Mil.
Depreciation, Depletion and Amortization(DDA) was ₨1,231 Mil.
Selling, General, & Admin. Expense(SGA) was ₨313 Mil.
Total Current Liabilities was ₨23,442 Mil.
Long-Term Debt & Capital Lease Obligation was ₨729 Mil.
Net Income was 897.126 + 237.376 + 1986.549 + 311.372 = ₨3,432 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ₨0 Mil.
Cash Flow from Operations was 2853.843 + 318.725 + -2342.422 + 3616.624 = ₨4,447 Mil.

Total Receivables was ₨13,625 Mil.
Revenue was 22112.698 + 20752.187 + 29555.065 + 29626.704 = ₨102,047 Mil.
Gross Profit was 4438.985 + 3013.217 + 4805.108 + 5995.898 = ₨18,253 Mil.
Total Current Assets was ₨37,479 Mil.
Total Assets was ₨46,719 Mil.
Property, Plant and Equipment(Net PPE) was ₨7,184 Mil.
Depreciation, Depletion and Amortization(DDA) was ₨1,249 Mil.
Selling, General, & Admin. Expense(SGA) was ₨260 Mil.
Total Current Liabilities was ₨18,989 Mil.
Long-Term Debt & Capital Lease Obligation was ₨1,971 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)
	=	(12223.481 / 91783.631)	/	(13624.563 / 102046.654)
	=	0.133177	/	0.133513
	=	0.9975

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)
	=	(18253.208 / 102046.654)	/	(7489.566 / 91783.631)
	=	0.178871	/	0.0816
	=	2.192

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 - (38989.69 + 5887.125) / 47332.407)	/	(1 - (37478.713 + 7184.205) / 46718.966)
	=	0.05188	/	0.044009
	=	1.1788

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
	=	91783.631	/	102046.654
	=	0.8994

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))
	=	(1249.307 / (1249.307 + 7184.205))	/	(1230.688 / (1230.688 + 5887.125))
	=	0.148136	/	0.172903
	=	0.8568

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)
	=	(312.953 / 91783.631)	/	(259.821 / 102046.654)
	=	0.00341	/	0.002546
	=	1.3394

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)
	=	((729.367 + 23441.863) / 47332.407)	/	((1970.899 + 18989.494) / 46718.966)
	=	0.51067	/	0.448648
	=	1.1382

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
	=	(3432.423 - 0	-	4446.77)	/	47332.407
	=	-0.02143

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.

Lotte Chemical Pakistan has a M-score of -2.09 suggests that the company is unlikely to be a manipulator.

Lotte Chemical Pakistan Beneish M-Score Related Terms

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Lotte Chemical Pakistan (KAR:LOTCHEM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » Lotte Chemical Pakistan Ltd (KAR:LOTCHEM) » Definitions » Beneish M-Score

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Address

EZ/1/P-4, Eastern Industrial Zone, P.O. Box 723, Port Qasim, Karachi, SD, PAK, 74200

Website

https://www.lottechem.pk

Lotte Chemical Pakistan Ltd is a Pakistan-based manufacturer and supplier of Purified Terephthalic Acid (PTA). The business activity of the firm is operated through the manufacture and sale of chemicals segments. The organization supplies products to the textile, domestic polyester, and polyethylene terephthalate packaging industries.

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