James Hardie Industries (James Hardie Industries) Beneish M-Score : -2.86 (As of Apr. 24, 2024)

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What is James Hardie Industries 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 -2.86 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

JHX' s Beneish M-Score Range Over the Past 10 Years
Min: -3.12 Med: -2.51 Max: -1.65
Current: -2.86

During the past 13 years, the highest Beneish M-Score of James Hardie Industries was -1.65. The lowest was -3.12. And the median was -2.51.

James Hardie Industries Beneish M-Score Historical Data

The historical data trend for James Hardie Industries'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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James Hardie Industries Beneish M-Score Chart

James Hardie Industries Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Beneish M-Score

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-1.65

-2.12

-3.12

-2.45

-2.56

James Hardie Industries Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.55	-2.56	-2.68	-2.74	-2.86

Competitive Comparison of James Hardie Industries's Beneish M-Score

For the Building Materials subindustry, James Hardie Industries'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.

James Hardie Industries's Beneish M-Score Distribution in the Building Materials Industry

For the Building Materials industry and Basic Materials sector, James Hardie Industries's Beneish M-Score distribution charts can be found below:

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

James Hardie Industries 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 James Hardie Industries 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 * 1.0794

0.528 * 0.8913

0.404 * 0.8256

0.892 * 1.0057

0.115 * 1.0301

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1818

4.679 * -0.064603

0.327 * 1.0061

-2.86

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $319 Mil.
Revenue was 978.3 + 998.8 + 954.3 + 917.8 = $3,849 Mil.
Gross Profit was 400.7 + 403.6 + 373.4 + 330 = $1,508 Mil.
Total Current Assets was $1,413 Mil.
Total Assets was $4,816 Mil.
Property, Plant and Equipment(Net PPE) was $2,016 Mil.
Depreciation, Depletion and Amortization(DDA) was $183 Mil.
Selling, General, & Admin. Expense(SGA) was $571 Mil.
Total Current Liabilities was $749 Mil.
Long-Term Debt & Capital Lease Obligation was $1,191 Mil.
Net Income was 145.1 + 151.7 + 157.8 + 81.4 = $536 Mil.
Non Operating Income was -7 + -14.4 + -0.4 + -56.1 = $-78 Mil.
Cash Flow from Operations was 290.4 + 206.8 + 252.3 + 175.5 = $925 Mil.

Total Receivables was $293 Mil.
Revenue was 860.8 + 997.6 + 1000.9 + 968.2 = $3,828 Mil.
Gross Profit was 289.6 + 353.3 + 339.1 + 354.3 = $1,336 Mil.
Total Current Assets was $1,001 Mil.
Total Assets was $4,308 Mil.
Property, Plant and Equipment(Net PPE) was $1,804 Mil.
Depreciation, Depletion and Amortization(DDA) was $169 Mil.
Selling, General, & Admin. Expense(SGA) was $480 Mil.
Total Current Liabilities was $676 Mil.
Long-Term Debt & Capital Lease Obligation was $1,050 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)
	=	(318.5 / 3849.2)	/	(293.4 / 3827.5)
	=	0.082744	/	0.076656
	=	1.0794

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)
	=	(1336.3 / 3827.5)	/	(1507.7 / 3849.2)
	=	0.349131	/	0.391692
	=	0.8913

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 - (1413 + 2015.7) / 4815.6)	/	(1 - (1000.8 + 1804.1) / 4307.6)
	=	0.288001	/	0.348849
	=	0.8256

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
	=	3849.2	/	3827.5
	=	1.0057

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))
	=	(168.9 / (168.9 + 1804.1))	/	(182.7 / (182.7 + 2015.7))
	=	0.085606	/	0.083106
	=	1.0301

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)
	=	(570.7 / 3849.2)	/	(480.2 / 3827.5)
	=	0.148265	/	0.12546
	=	1.1818

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)
	=	((1191.4 + 749.1) / 4815.6)	/	((1049.7 + 675.5) / 4307.6)
	=	0.402961	/	0.400501
	=	1.0061

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
	=	(536 - -77.9	-	925)	/	4815.6
	=	-0.064603

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.

James Hardie Industries has a M-score of -2.86 suggests that the company is unlikely to be a manipulator.

James Hardie Industries Beneish M-Score Related Terms

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James Hardie Industries (James Hardie Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » James Hardie Industries PLC (NYSE:JHX) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

JHIUF:USA JHA0:Germany JHA:Germany JHA:Germany JHX:Australia

Address

Harcourt Street, Europa House, 2nd Floor, Harcourt Centre, Dublin, IRL, D02 WR20

Website

https://ir.jameshardie.com.au

James Hardie is a manufacturer of fiber cement-based building products, selling primarily to the residential construction industry. North America is the primary geography, generating about 80% of group earnings. Here, it is the largest manufacturer of fiber cement, which is mainly used for siding. Asia-Pacific businesses in Australia, New Zealand, and the Philippines, as well as Europe, make up the rest of earnings. In 2018, the group acquired Fermacell, a fiber gypsum building products business headquartered in Germany with operations throughout Europe.