Rich Development Co (ROCO:5512) Beneish M-Score : -2.54 (As of Dec. 15, 2024)

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What is Rich Development Co 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 -2.54 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ROCO:5512' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03 Med: -2.07 Max: -1.21
Current: -2.54

During the past 13 years, the highest Beneish M-Score of Rich Development Co was -1.21. The lowest was -3.03. And the median was -2.07.

Rich Development Co Beneish M-Score Historical Data

The historical data trend for Rich Development Co'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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Rich Development Co Beneish M-Score Chart

Rich Development Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.83

-1.97

-3.01

-1.80

-2.88

Rich Development Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Beneish M-Score	Get a 7-Day Free Trial															-2.42	-2.88	-2.95	-2.95	-2.54

Competitive Comparison of Rich Development Co's Beneish M-Score

For the Real Estate - Diversified subindustry, Rich Development Co'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.

Rich Development Co's Beneish M-Score Distribution in the Real Estate Industry

For the Real Estate industry and Real Estate sector, Rich Development Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Rich Development Co's Beneish M-Score falls into.

Rich Development Co 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 Rich Development Co 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 * 1.3863

0.528 * 0.8043

0.404 * 0.9934

0.892 * 0.6867

0.115 * 0.8727

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.3419

4.679 * 0.007611

0.327 * 0.9653

-2.54

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was NT$2,469 Mil.
Revenue was 1395.363 + 1040.874 + 1480.727 + 1491.188 = NT$5,408 Mil.
Gross Profit was 149.603 + 143.824 + 383.926 + 219.324 = NT$897 Mil.
Total Current Assets was NT$22,077 Mil.
Total Assets was NT$40,382 Mil.
Property, Plant and Equipment(Net PPE) was NT$6,715 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$500 Mil.
Selling, General, & Admin. Expense(SGA) was NT$532 Mil.
Total Current Liabilities was NT$13,363 Mil.
Long-Term Debt & Capital Lease Obligation was NT$7,854 Mil.
Net Income was 3.196 + -28.869 + 85.644 + 33.462 = NT$93 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = NT$0 Mil.
Cash Flow from Operations was 298.804 + -142.024 + -162.971 + -207.74 = NT$-214 Mil.

Total Receivables was NT$2,594 Mil.
Revenue was 2606.735 + 2141.628 + 1465.99 + 1661.756 = NT$7,876 Mil.
Gross Profit was 514.128 + 274.973 + 172.252 + 88.913 = NT$1,050 Mil.
Total Current Assets was NT$21,428 Mil.
Total Assets was NT$39,755 Mil.
Property, Plant and Equipment(Net PPE) was NT$6,841 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$441 Mil.
Selling, General, & Admin. Expense(SGA) was NT$578 Mil.
Total Current Liabilities was NT$13,637 Mil.
Long-Term Debt & Capital Lease Obligation was NT$8,002 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)
	=	(2469.224 / 5408.152)	/	(2594.039 / 7876.109)
	=	0.456574	/	0.329355
	=	1.3863

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)
	=	(1050.266 / 7876.109)	/	(896.677 / 5408.152)
	=	0.133348	/	0.165801
	=	0.8043

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 - (22076.836 + 6714.942) / 40382.404)	/	(1 - (21427.557 + 6840.681) / 39755.011)
	=	0.287022	/	0.288939
	=	0.9934

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
	=	5408.152	/	7876.109
	=	0.6867

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))
	=	(440.508 / (440.508 + 6840.681))	/	(500.184 / (500.184 + 6714.942))
	=	0.060499	/	0.069324
	=	0.8727

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)
	=	(532.148 / 5408.152)	/	(577.516 / 7876.109)
	=	0.098397	/	0.073325
	=	1.3419

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)
	=	((7853.517 + 13363.351) / 40382.404)	/	((8001.698 + 13637.438) / 39755.011)
	=	0.525399	/	0.544312
	=	0.9653

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
	=	(93.433 - 0	-	-213.931)	/	40382.404
	=	0.007611

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.

Rich Development Co has a M-score of -2.54 suggests that the company is unlikely to be a manipulator.

Rich Development Co Beneish M-Score Related Terms

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Rich Development Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Rich Development Co Ltd (ROCO:5512) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

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Address

No. 99, Chi Lin Road, 8th Floor, Jhongshan District, Taipei, TWN, 104

Website

https://www.rhd.com.tw

Rich Development Co Ltd is a Taiwan-based company engaged in the construction, development, leasing, and distribution of residential and commercial buildings. The company's main business includes commissioning manufacturers to build commercial buildings and lease and sale of public housing; commissioned by government industrial authorities to handle the development, leasing, and management of industrial areas; construction of sewage treatment plants and operation of sewage treatment projects; operation of resort hotels and travel agency operations and others. Its segments include the Construction segment, the Sewage treatment segment: and the Tourist hotel segment.

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