Kvika Banki hf 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 Kvika Banki hf 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 * 1.0024 | + | 0.892 * 1.157 | + | 0.115 * 0.8096 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0 | + | 4.679 * -0.027913 | - | 0.327 * 0.8081 |
| = | -2.26 |
* 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 (Dec24) TTM: | Last Year (Dec23) TTM: |
Total Receivables was kr0 Mil.
Revenue was 4650.021 + 4454.267 + 3970.254 + 4068.55 = kr17,143 Mil.
Gross Profit was 4650.021 + 4454.267 + 3970.254 + 4068.55 = kr17,143 Mil.
Total Current Assets was kr0 Mil.
Total Assets was kr354,594 Mil.
Property, Plant and Equipment(Net PPE) was kr1,782 Mil.
Depreciation, Depletion and Amortization(DDA) was kr1,106 Mil.
Selling, General, & Admin. Expense(SGA) was kr0 Mil.
Total Current Liabilities was kr0 Mil.
Long-Term Debt & Capital Lease Obligation was kr58,300 Mil.
Net Income was 3446.783 + 2360.866 + 1256.457 + 1079.337 = kr8,143 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = kr0 Mil.
Cash Flow from Operations was 5387.869 + -15621.819 + 23273.059 + 5002.275 = kr18,041 Mil.
|
Total Receivables was kr0 Mil.
Revenue was 3984.508 + 3024.549 + 4318.643 + 3488.766 = kr14,816 Mil.
Gross Profit was 3984.508 + 3024.549 + 4318.643 + 3488.766 = kr14,816 Mil.
Total Current Assets was kr0 Mil.
Total Assets was kr335,397 Mil.
Property, Plant and Equipment(Net PPE) was kr2,469 Mil.
Depreciation, Depletion and Amortization(DDA) was kr1,109 Mil.
Selling, General, & Admin. Expense(SGA) was kr3,660 Mil.
Total Current Liabilities was kr0 Mil.
Long-Term Debt & Capital Lease Obligation was kr68,243 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 / 17143.092) | / | (0 / 14816.466) |
| = | 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) |
| = | (14816.466 / 14816.466) | / | (17143.092 / 17143.092) |
| = | 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 + 1782.385) / 354594.442) | / | (1 - (0 + 2469.488) / 335397.432) |
| = | 0.994973 | / | 0.992637 |
| | = | 1.0024 |
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 |
| = | 17143.092 | / | 14816.466 |
| | = | 1.157 |
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)) |
| = | (1109.49 / (1109.49 + 2469.488)) | / | (1106.068 / (1106.068 + 1782.385)) |
| = | 0.310002 | / | 0.382927 |
| | = | 0.8096 |
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 / 17143.092) | / | (3660.136 / 14816.466) |
| = | 0 | / | 0.247032 |
| | = | 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) |
| = | ((58300.114 + 0) / 354594.442) | / | ((68242.942 + 0) / 335397.432) |
| = | 0.164414 | / | 0.203469 |
| | = | 0.8081 |
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 |
| = | (8143.443 - 0 | - | 18041.384) | / | 354594.442 |
| | = | -0.027913 |
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.
Kvika Banki hf has a M-score of -2.26 suggests that the company is unlikely to be a manipulator.
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