MEDIROM Healthcare Technologies (MEDIROM Healthcare Technologies) Beneish M-Score : -2.22 (As of Jun. 23, 2024)

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What is MEDIROM Healthcare Technologies 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 -2.22 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MRM' s Beneish M-Score Range Over the Past 10 Years
Min: -2.75 Med: -2.31 Max: -1.78
Current: -2.22

During the past 6 years, the highest Beneish M-Score of MEDIROM Healthcare Technologies was -1.78. The lowest was -2.75. And the median was -2.31.

MEDIROM Healthcare Technologies Beneish M-Score Historical Data

The historical data trend for MEDIROM Healthcare Technologies'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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MEDIROM Healthcare Technologies Beneish M-Score Chart

MEDIROM Healthcare Technologies Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.39

-2.75

-1.78

-2.22

MEDIROM Healthcare Technologies Semi-Annual Data
	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Beneish M-Score	Get a 7-Day Free Trial						-2.75	-	-1.78	-	-2.22

Competitive Comparison of MEDIROM Healthcare Technologies's Beneish M-Score

For the Personal Services subindustry, MEDIROM Healthcare Technologies'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.

MEDIROM Healthcare Technologies's Beneish M-Score Distribution in the Personal Services Industry

For the Personal Services industry and Consumer Cyclical sector, MEDIROM Healthcare Technologies's Beneish M-Score distribution charts can be found below:

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

MEDIROM Healthcare Technologies 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 MEDIROM Healthcare Technologies 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 * 0.9442

0.528 * 1.1906

0.404 * 1.253

0.892 * 0.92

0.115 * 0.794

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1059

4.679 * 0.046752

0.327 * 0.9756

-2.22

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $8.53 Mil.
Revenue was $47.42 Mil.
Gross Profit was $10.90 Mil.
Total Current Assets was $12.22 Mil.
Total Assets was $47.57 Mil.
Property, Plant and Equipment(Net PPE) was $17.65 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.75 Mil.
Selling, General, & Admin. Expense(SGA) was $13.62 Mil.
Total Current Liabilities was $24.73 Mil.
Long-Term Debt & Capital Lease Obligation was $16.57 Mil.
Net Income was $0.80 Mil.
Gross Profit was $2.96 Mil.
Cash Flow from Operations was $-4.39 Mil.

Total Receivables was $9.82 Mil.
Revenue was $51.54 Mil.
Gross Profit was $14.10 Mil.
Total Current Assets was $17.52 Mil.
Total Assets was $50.01 Mil.
Property, Plant and Equipment(Net PPE) was $17.64 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.36 Mil.
Selling, General, & Admin. Expense(SGA) was $13.38 Mil.
Total Current Liabilities was $27.00 Mil.
Long-Term Debt & Capital Lease Obligation was $17.51 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)
	=	(8.528 / 47.422)	/	(9.817 / 51.544)
	=	0.179832	/	0.190459
	=	0.9442

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)
	=	(14.101 / 51.544)	/	(10.896 / 47.422)
	=	0.273572	/	0.229767
	=	1.1906

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 - (12.215 + 17.647) / 47.57)	/	(1 - (17.516 + 17.638) / 50.012)
	=	0.372251	/	0.297089
	=	1.253

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
	=	47.422	/	51.544
	=	0.92

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))
	=	(1.364 / (1.364 + 17.638))	/	(1.754 / (1.754 + 17.647))
	=	0.071782	/	0.090408
	=	0.794

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)
	=	(13.616 / 47.422)	/	(13.382 / 51.544)
	=	0.287124	/	0.259623
	=	1.1059

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)
	=	((16.568 + 24.73) / 47.57)	/	((17.51 + 26.995) / 50.012)
	=	0.868152	/	0.889886
	=	0.9756

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
	=	(0.799 - 2.963	-	-4.388)	/	47.57
	=	0.046752

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.

MEDIROM Healthcare Technologies has a M-score of -2.22 suggests that the company is unlikely to be a manipulator.

MEDIROM Healthcare Technologies Beneish M-Score Related Terms

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MEDIROM Healthcare Technologies (MEDIROM Healthcare Technologies) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Personal Services » MEDIROM Healthcare Technologies Inc (NAS:MRM) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

2-3-1 Daiba, Minato-ku, 16th Floor Tradepia Odaiba, Tokyo, JPN, 135-0091

Website

https://www.medirom.co.jp

MEDIROM Healthcare Technologies Inc provides health services. The company is a franchiser and operator of healthcare salons and operates in segments namely Relaxation Salon, Digital Preventative Healthcare, and Luxury Beauty Segment. The company generates a majority of its revenue from the Relaxation Salon business segment. Geographically, the company generates a maximum share of its revenue from Japan.