Checkit (LSE:CKT) Beneish M-Score : -2.31 (As of Jun. 24, 2024)

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What is Checkit 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 -2.31 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LSE:CKT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.51 Med: -3.07 Max: 18.12
Current: -2.31

During the past 13 years, the highest Beneish M-Score of Checkit was 18.12. The lowest was -3.51. And the median was -3.07.

Checkit Beneish M-Score Historical Data

The historical data trend for Checkit'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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Checkit Beneish M-Score Chart

Checkit Annual Data

Trend

Jan15

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

Beneish M-Score

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18.12

-2.65

-3.23

-3.51

-2.31

Checkit Semi-Annual Data
	Jul14	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24
Beneish M-Score	Get a 7-Day Free Trial															-3.23	-	-3.51	-	-2.31

Competitive Comparison of Checkit's Beneish M-Score

For the Software - Application subindustry, Checkit'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.

Checkit's Beneish M-Score Distribution in the Software Industry

For the Software industry and Technology sector, Checkit's Beneish M-Score distribution charts can be found below:

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

Checkit 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 Checkit 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 * 0.8369

0.528 * 0.9466

0.404 * 1.4827

0.892 * 1.165

0.115 * 0.9821

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.7585

4.679 * 0.008658

0.327 * 1.2154

-2.31

This Year (Jan24) TTM:

Last Year (Jan23) TTM:

Total Receivables was £3.90 Mil.
Revenue was £12.00 Mil.
Gross Profit was £8.00 Mil.
Total Current Assets was £17.30 Mil.
Total Assets was £23.10 Mil.
Property, Plant and Equipment(Net PPE) was £0.80 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.40 Mil.
Selling, General, & Admin. Expense(SGA) was £11.40 Mil.
Total Current Liabilities was £8.00 Mil.
Long-Term Debt & Capital Lease Obligation was £0.30 Mil.
Net Income was £-4.50 Mil.
Gross Profit was £0.00 Mil.
Cash Flow from Operations was £-4.70 Mil.

Total Receivables was £4.00 Mil.
Revenue was £10.30 Mil.
Gross Profit was £6.50 Mil.
Total Current Assets was £22.50 Mil.
Total Assets was £27.40 Mil.
Property, Plant and Equipment(Net PPE) was £0.90 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.50 Mil.
Selling, General, & Admin. Expense(SGA) was £12.90 Mil.
Total Current Liabilities was £7.80 Mil.
Long-Term Debt & Capital Lease Obligation was £0.30 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)
	=	(3.9 / 12)	/	(4 / 10.3)
	=	0.325	/	0.38835
	=	0.8369

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)
	=	(6.5 / 10.3)	/	(8 / 12)
	=	0.631068	/	0.666667
	=	0.9466

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 - (17.3 + 0.8) / 23.1)	/	(1 - (22.5 + 0.9) / 27.4)
	=	0.21645	/	0.145985
	=	1.4827

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
	=	12	/	10.3
	=	1.165

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))
	=	(1.5 / (1.5 + 0.9))	/	(1.4 / (1.4 + 0.8))
	=	0.625	/	0.636364
	=	0.9821

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)
	=	(11.4 / 12)	/	(12.9 / 10.3)
	=	0.95	/	1.252427
	=	0.7585

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)
	=	((0.3 + 8) / 23.1)	/	((0.3 + 7.8) / 27.4)
	=	0.359307	/	0.29562
	=	1.2154

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
	=	(-4.5 - 0	-	-4.7)	/	23.1
	=	0.008658

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.

Checkit has a M-score of -2.31 suggests that the company is unlikely to be a manipulator.

Checkit Beneish M-Score Related Terms

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Checkit (LSE:CKT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Checkit PLC (LSE:CKT) » Definitions » Beneish M-Score

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Traded in Other Exchanges

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Address

JJ Thomson Avenue, Broers Building, Cambridge, GBR, CB3 0FA

Website

https://www.checkit.net

Checkit PLC is a real-time operation management software company engaged in providing intelligent operations management platforms for desk less workforces, enabling operational agility and intelligent decision-making in large multinational and complex national organizations. The company's subscription business model offers optional plugins for smart sensor networks and workflow task management. Its solutions apply digital tools and monitoring to transform workforce management and incorporate physical assets into a digital ecosystem using Internet of Things (IoT) sensors and monitoring devices. The company has two operating segments; the United Kingdom, and The Americas. It derives a majority of its revenue from the United Kingdom.

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