Netcompany Group A/S (OCSE:NETC) Beneish M-Score : -2.44 (As of May. 27, 2024)

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What is Netcompany Group A/S 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 -2.44 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Netcompany Group A/S's Beneish M-Score or its related term are showing as below:

OCSE:NETC' s Beneish M-Score Range Over the Past 10 Years
Min: -2.63 Med: -2.35 Max: -1.56
Current: -2.44

During the past 9 years, the highest Beneish M-Score of Netcompany Group A/S was -1.56. The lowest was -2.63. And the median was -2.35.

Netcompany Group A/S Beneish M-Score Historical Data

The historical data trend for Netcompany Group A/S'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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Netcompany Group A/S Beneish M-Score Chart

Netcompany Group A/S Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.41

-2.63

-1.56

-2.33

-2.53

Netcompany Group A/S Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.48	-2.46	-2.43	-2.53	-2.44

Competitive Comparison of Netcompany Group A/S's Beneish M-Score

For the Information Technology Services subindustry, Netcompany Group A/S'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.

Netcompany Group A/S's Beneish M-Score Distribution in the Software Industry

For the Software industry and Technology sector, Netcompany Group A/S's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Netcompany Group A/S's Beneish M-Score falls into.

Netcompany Group A/S 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 Netcompany Group A/S 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 * 1.0823

0.528 * 1.1335

0.404 * 0.8864

0.892 * 1.074

0.115 * 1.6457

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9761

4.679 * -0.036919

0.327 * 1.0968

-2.44

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was kr2,784 Mil.
Revenue was 1598.1 + 1582.6 + 1461.7 + 1493.9 = kr6,136 Mil.
Gross Profit was 438.1 + 457.7 + 402.4 + 402.8 = kr1,701 Mil.
Total Current Assets was kr3,270 Mil.
Total Assets was kr8,218 Mil.
Property, Plant and Equipment(Net PPE) was kr924 Mil.
Depreciation, Depletion and Amortization(DDA) was kr320 Mil.
Selling, General, & Admin. Expense(SGA) was kr444 Mil.
Total Current Liabilities was kr1,973 Mil.
Long-Term Debt & Capital Lease Obligation was kr2,323 Mil.
Net Income was 93.4 + 65.5 + 80 + 55 = kr294 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = kr0 Mil.
Cash Flow from Operations was 28.9 + 431.4 + 136.6 + 0.4 = kr597 Mil.

Total Receivables was kr2,395 Mil.
Revenue was 1540.2 + 1519.3 + 1348.1 + 1305.8 = kr5,713 Mil.
Gross Profit was 440.1 + 520 + 471.1 + 364 = kr1,795 Mil.
Total Current Assets was kr2,814 Mil.
Total Assets was kr7,159 Mil.
Property, Plant and Equipment(Net PPE) was kr390 Mil.
Depreciation, Depletion and Amortization(DDA) was kr287 Mil.
Selling, General, & Admin. Expense(SGA) was kr424 Mil.
Total Current Liabilities was kr1,497 Mil.
Long-Term Debt & Capital Lease Obligation was kr1,914 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)
	=	(2783.7 / 6136.3)	/	(2394.7 / 5713.4)
	=	0.453645	/	0.419137
	=	1.0823

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)
	=	(1795.2 / 5713.4)	/	(1701 / 6136.3)
	=	0.314209	/	0.277203
	=	1.1335

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 - (3269.9 + 923.6) / 8218)	/	(1 - (2813.7 + 390.2) / 7159.1)
	=	0.489718	/	0.552472
	=	0.8864

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
	=	6136.3	/	5713.4
	=	1.074

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))
	=	(286.5 / (286.5 + 390.2))	/	(319.9 / (319.9 + 923.6))
	=	0.423378	/	0.257258
	=	1.6457

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)
	=	(444.4 / 6136.3)	/	(423.9 / 5713.4)
	=	0.072421	/	0.074194
	=	0.9761

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)
	=	((2322.6 + 1972.7) / 8218)	/	((1914.3 + 1497.2) / 7159.1)
	=	0.52267	/	0.476526
	=	1.0968

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
	=	(293.9 - 0	-	597.3)	/	8218
	=	-0.036919

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.

Netcompany Group A/S has a M-score of -2.44 suggests that the company is unlikely to be a manipulator.

Netcompany Group A/S Beneish M-Score Related Terms

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Netcompany Group A/S (OCSE:NETC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Netcompany Group A/S (OCSE:NETC) » Definitions » Beneish M-Score

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Traded in Other Exchanges

0YH9:UK 60N:Germany

Address

Gronningen 17, Copenhagen, DNK, 1270

Website

https://www.netcompany.com

Netcompany Group A/S is an information technology company. The company is engaged in delivering business-critical IT solutions to large Public and Private sector customers and supporting them in their digital transformation journeys. It generates maximum revenue from the Public segment. The company serves Finance; Government; Manufacturing and engineering; Municipalities; Retail and trade; Service companies; Telecommunication and media; Energy and Utilities and others. Geographically, it derives a majority of its revenue from Denmark.