ASA International Group (LSE:ASAI) Beneish M-Score : -2.25 (As of May. 25, 2024)

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What is ASA International 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.

Good Sign:

Beneish M-Score -2.25 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LSE:ASAI' s Beneish M-Score Range Over the Past 10 Years
Min: -2.72 Med: -2.15 Max: -1.15
Current: -2.25

During the past 9 years, the highest Beneish M-Score of ASA International Group was -1.15. The lowest was -2.72. And the median was -2.15.

ASA International 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 ASA International 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 * 0.9919

0.892 * 0.9608

0.115 * 1.3301

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0394

4.679 * 0.052813

0.327 * 1.0459

-2.25

* 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 £0.0 Mil.
Revenue was £115.5 Mil.
Gross Profit was £115.5 Mil.
Total Current Assets was £0.0 Mil.
Total Assets was £387.1 Mil.
Property, Plant and Equipment(Net PPE) was £9.5 Mil.
Depreciation, Depletion and Amortization(DDA) was £4.3 Mil.
Selling, General, & Admin. Expense(SGA) was £23.0 Mil.
Total Current Liabilities was £0.0 Mil.
Long-Term Debt & Capital Lease Obligation was £218.6 Mil.
Net Income was £7.3 Mil.
Gross Profit was £0.0 Mil.
Cash Flow from Operations was £-13.2 Mil.

Total Receivables was £0.0 Mil.
Revenue was £120.2 Mil.
Gross Profit was £120.2 Mil.
Total Current Assets was £0.0 Mil.
Total Assets was £402.1 Mil.
Property, Plant and Equipment(Net PPE) was £6.7 Mil.
Depreciation, Depletion and Amortization(DDA) was £4.7 Mil.
Selling, General, & Admin. Expense(SGA) was £23.0 Mil.
Total Current Liabilities was £0.0 Mil.
Long-Term Debt & Capital Lease Obligation was £217.1 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 / 115.526)	/	(0 / 120.235)
	=	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)
	=	(120.235 / 120.235)	/	(115.526 / 115.526)
	=	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 + 9.497) / 387.121)	/	(1 - (0 + 6.652) / 402.086)
	=	0.975468	/	0.983456
	=	0.9919

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
	=	115.526	/	120.235
	=	0.9608

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))
	=	(4.732 / (4.732 + 6.652))	/	(4.317 / (4.317 + 9.497))
	=	0.415671	/	0.312509
	=	1.3301

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)
	=	(22.953 / 115.526)	/	(22.983 / 120.235)
	=	0.198683	/	0.191151
	=	1.0394

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)
	=	((218.58 + 0) / 387.121)	/	((217.066 + 0) / 402.086)
	=	0.56463	/	0.53985
	=	1.0459

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
	=	(7.273 - 0	-	-13.172)	/	387.121
	=	0.052813

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.

ASA International Group has a M-score of -2.25 suggests that the company is unlikely to be a manipulator.

ASA International Group Beneish M-Score Related Terms

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ASA International Group (LSE:ASAI) Business Description

Industry

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ASAIl:UK

Address

Bir Uttam A.N.M. Nuruzzaman Sarak, ASA Tower, 12th Floor 23/3, Shyamoli, Dhaka, BGD, 1207

Website

https://www.asa-international.com

ASA International Group PLC is an international micro-finance institution, which aims to enhance financial inclusion among low-income populations throughout Asia and Africa. Its geographical segments include West Africa, which includes Ghana, Nigeria, Sierra Leone; East Africa, which includes Kenya, Uganda, Tanzania, Rwanda; South Asia, which includes India, Pakistan, Sri Lanka; South East Asia, which includes Myanmar, Philippines, and Holding & other non-operating entities, which includes holding entities and other entities without microfinance activities. The majority is from the West Africa.