Engage XR Holdings (LSE:EXR) Beneish M-Score : -2.45 (As of Jun. 10, 2024)

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What is Engage XR Holdings 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 -2.45 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LSE:EXR' s Beneish M-Score Range Over the Past 10 Years
Min: -4.36 Med: -3.11 Max: -2.28
Current: -2.45

During the past 7 years, the highest Beneish M-Score of Engage XR Holdings was -2.28. The lowest was -4.36. And the median was -3.11.

Engage XR Holdings Beneish M-Score Historical Data

The historical data trend for Engage XR Holdings'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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Engage XR Holdings Beneish M-Score Chart

Engage XR Holdings Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-3.31

-3.11

-2.28

-4.36

-2.45

Engage XR Holdings Semi-Annual Data
	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Beneish M-Score	Get a 7-Day Free Trial								-2.28	-	-4.36	-	-2.45

Competitive Comparison of Engage XR Holdings's Beneish M-Score

For the Software - Application subindustry, Engage XR Holdings'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.

Engage XR Holdings's Beneish M-Score Distribution in the Software Industry

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

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

Engage XR Holdings 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 Engage XR Holdings 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 * 1.0752

0.528 * 0.9106

0.404 * 0

0.892 * 0.945

0.115 * 1.5353

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8666

4.679 * 0.024774

0.327 * 0.2295

-2.46

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was £0.89 Mil.
Revenue was £3.18 Mil.
Gross Profit was £2.85 Mil.
Total Current Assets was £7.85 Mil.
Total Assets was £7.95 Mil.
Property, Plant and Equipment(Net PPE) was £0.11 Mil.
Depreciation, Depletion and Amortization(DDA) was £0.13 Mil.
Selling, General, & Admin. Expense(SGA) was £6.51 Mil.
Total Current Liabilities was £0.58 Mil.
Long-Term Debt & Capital Lease Obligation was £0.03 Mil.
Net Income was £-3.49 Mil.
Gross Profit was £0.00 Mil.
Cash Flow from Operations was £-3.69 Mil.

Total Receivables was £0.87 Mil.
Revenue was £3.37 Mil.
Gross Profit was £2.75 Mil.
Total Current Assets was £3.11 Mil.
Total Assets was £3.23 Mil.
Property, Plant and Equipment(Net PPE) was £0.08 Mil.
Depreciation, Depletion and Amortization(DDA) was £0.41 Mil.
Selling, General, & Admin. Expense(SGA) was £7.94 Mil.
Total Current Liabilities was £1.07 Mil.
Long-Term Debt & Capital Lease Obligation was £0.00 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)
	=	(0.885 / 3.18)	/	(0.871 / 3.365)
	=	0.278302	/	0.258841
	=	1.0752

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)
	=	(2.748 / 3.365)	/	(2.852 / 3.18)
	=	0.816642	/	0.896855
	=	0.9106

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 - (7.845 + 0.107) / 7.952)	/	(1 - (3.109 + 0.083) / 3.227)
	=	0	/	0.010846
	=	0

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
	=	3.18	/	3.365
	=	0.945

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))
	=	(0.406 / (0.406 + 0.083))	/	(0.126 / (0.126 + 0.107))
	=	0.830266	/	0.540773
	=	1.5353

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)
	=	(6.506 / 3.18)	/	(7.944 / 3.365)
	=	2.045912	/	2.360773
	=	0.8666

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)
	=	((0.03 + 0.575) / 7.952)	/	((0 + 1.07) / 3.227)
	=	0.076081	/	0.331577
	=	0.2295

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
	=	(-3.493 - 0	-	-3.69)	/	7.952
	=	0.024774

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.

Engage XR Holdings has a M-score of -2.46 suggests that the company is unlikely to be a manipulator.

Engage XR Holdings Beneish M-Score Related Terms

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Engage XR Holdings (LSE:EXR) Business Description

Industry

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6VR:Germany

Address

Old Kilmeaden Road, Unit 9 Cleaboy Business Park, Waterford, IRL, X91 AX83

Website

https://www.engagevr.io

Engage XR Holdings PLC operates as a virtual reality software and technology company in Ireland. It is engaged in the development of the educational Virtual Reality platform - ENGAGE. The company also develops and sells online virtual social learning and presentation platforms for creating, sharing, and delivering proprietary and third-party VR content for educational and corporate training purposes. Its products include ENGAGE platform, 1943 Berlin Blitz, Titanic VR, Apollo 11 VR, and RCSI medical training app.