GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » IndusInd Bank Ltd (NSE:INDUSINDBK) » Definitions » Beneish M-Score

IndusInd Bank (NSE:INDUSINDBK) Beneish M-Score : -1.89 (As of Jun. 20, 2024)


View and export this data going back to 1998. Start your Free Trial

What is IndusInd Bank 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 -1.89 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

NSE:INDUSINDBK' s Beneish M-Score Range Over the Past 10 Years
Min: -2.87   Med: -2.12   Max: -1.89
Current: -1.89

During the past 13 years, the highest Beneish M-Score of IndusInd Bank was -1.89. The lowest was -2.87. And the median was -2.12.


IndusInd Bank 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 IndusInd Bank for today is based on a combination of the following eight different indices:

M=-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 * 1+0.892 * 1.1648+0.115 * 0.9859
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0+4.679 * 0.050286-0.327 * 0.8905
=-1.89

* 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 (Mar24) TTM:Last Year (Mar23) TTM:
Total Receivables was ₹0 Mil.
Revenue was ₹300,117 Mil.
Gross Profit was ₹300,117 Mil.
Total Current Assets was ₹0 Mil.
Total Assets was ₹5,150,940 Mil.
Property, Plant and Equipment(Net PPE) was ₹23,240 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹4,630 Mil.
Selling, General, & Admin. Expense(SGA) was ₹0 Mil.
Total Current Liabilities was ₹0 Mil.
Long-Term Debt & Capital Lease Obligation was ₹476,114 Mil.
Net Income was ₹89,773 Mil.
Gross Profit was ₹0 Mil.
Cash Flow from Operations was ₹-169,247 Mil.
Total Receivables was ₹0 Mil.
Revenue was ₹257,649 Mil.
Gross Profit was ₹257,649 Mil.
Total Current Assets was ₹0 Mil.
Total Assets was ₹4,578,366 Mil.
Property, Plant and Equipment(Net PPE) was ₹20,789 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹4,072 Mil.
Selling, General, & Admin. Expense(SGA) was ₹1,611 Mil.
Total Current Liabilities was ₹0 Mil.
Long-Term Debt & Capital Lease Obligation was ₹475,213 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 / 300116.9) / (0 / 257648.9)
=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)
=(257648.9 / 257648.9) / (300116.9 / 300116.9)
=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 + 23240.2) / 5150939.7) / (1 - (0 + 20789.279) / 4578366.33)
=0.995488 / 0.995459
=1

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
=300116.9 / 257648.9
=1.1648

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))
=(4072.1 / (4072.1 + 20789.279)) / (4630.4 / (4630.4 + 23240.2))
=0.163792 / 0.166139
=0.9859

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)
=(0 / 300116.9) / (1610.571 / 257648.9)
=0 / 0.006251
=0

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)
=((476114.1 + 0) / 5150939.7) / ((475213.342 + 0) / 4578366.33)
=0.092432 / 0.103795
=0.8905

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
=(89773 - 0 - -169247.1) / 5150939.7
=0.050286

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.

IndusInd Bank has a M-score of -1.89 suggests that the company is unlikely to be a manipulator.


IndusInd Bank Beneish M-Score Related Terms

Thank you for viewing the detailed overview of IndusInd Bank's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


IndusInd Bank (NSE:INDUSINDBK) Business Description

Traded in Other Exchanges
Address
841, Senapati Bapat Marg, 8th Floor, Tower 1, One World Centre, Prabhadevi (West), Mumbai, MH, IND, 400013
IndusInd Bank Ltd is a full-service banking group operating in India. Its services include consumer banking, credit cards, consumer finance, corporate banking, commercial banking, global markets, transaction banking, priority sector lending, risk management, and financial restructuring and reconstruction. The Bank operates in four business segments, viz. Treasury, Corporate/ Wholesale Banking, Retail Banking and Other Banking Operations. The Bank generates majority of the revenue from Retail Banking segment. The bank's strategic focus has been to maintain its high-street brand, and it has adopted various initiatives to increase the brand's visibility through digital marketing and increased financial technology. Most of its loan book is in term loans entirely exposed to India.