Kwong Lung Enterprise Co (ROCO:8916) Beneish M-Score : -2.59 (As of Dec. 12, 2024)

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What is Kwong Lung Enterprise 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 -2.59 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ROCO:8916' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27 Med: -2.49 Max: -1.64
Current: -2.59

During the past 13 years, the highest Beneish M-Score of Kwong Lung Enterprise Co was -1.64. The lowest was -3.27. And the median was -2.49.

Kwong Lung Enterprise Co Beneish M-Score Historical Data

The historical data trend for Kwong Lung Enterprise 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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Kwong Lung Enterprise Co Beneish M-Score Chart

Kwong Lung Enterprise Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.26

-2.85

-1.90

-2.83

-3.08

Kwong Lung Enterprise 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															-2.93	-3.08	-2.70	-2.49	-2.59

Competitive Comparison of Kwong Lung Enterprise Co's Beneish M-Score

For the Textile Manufacturing subindustry, Kwong Lung Enterprise 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.

Kwong Lung Enterprise Co's Beneish M-Score Distribution in the Manufacturing - Apparel & Accessories Industry

For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, Kwong Lung Enterprise Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Kwong Lung Enterprise Co's Beneish M-Score falls into.

Kwong Lung Enterprise 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 Kwong Lung Enterprise 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 * 1.039

0.528 * 1.0711

0.404 * 1.2536

0.892 * 0.8837

0.115 * 1.3409

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0473

4.679 * -0.025639

0.327 * 1.2717

-2.59

This Year (Sep24) TTM:

Last Year (Sep23) TTM:

Total Receivables was NT$1,198 Mil.
Revenue was 2220.15 + 2515.866 + 1510.986 + 1309.032 = NT$7,556 Mil.
Gross Profit was 397.661 + 466.124 + 245.962 + 191.879 = NT$1,302 Mil.
Total Current Assets was NT$4,389 Mil.
Total Assets was NT$9,642 Mil.
Property, Plant and Equipment(Net PPE) was NT$2,377 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$157 Mil.
Selling, General, & Admin. Expense(SGA) was NT$684 Mil.
Total Current Liabilities was NT$3,009 Mil.
Long-Term Debt & Capital Lease Obligation was NT$596 Mil.
Net Income was 139.469 + 246.2 + 148.544 + 14.601 = NT$549 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = NT$0 Mil.
Cash Flow from Operations was 690.762 + -56.232 + -599.349 + 760.846 = NT$796 Mil.

Total Receivables was NT$1,305 Mil.
Revenue was 2185.219 + 2467.94 + 1746.053 + 2151.412 = NT$8,551 Mil.
Gross Profit was 397.766 + 496.468 + 296.021 + 387.363 = NT$1,578 Mil.
Total Current Assets was NT$4,460 Mil.
Total Assets was NT$8,300 Mil.
Property, Plant and Equipment(Net PPE) was NT$1,865 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$169 Mil.
Selling, General, & Admin. Expense(SGA) was NT$739 Mil.
Total Current Liabilities was NT$1,962 Mil.
Long-Term Debt & Capital Lease Obligation was NT$478 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)
	=	(1198.214 / 7556.034)	/	(1305.012 / 8550.624)
	=	0.158577	/	0.152622
	=	1.039

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)
	=	(1577.618 / 8550.624)	/	(1301.626 / 7556.034)
	=	0.184503	/	0.172263
	=	1.0711

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 - (4388.83 + 2376.942) / 9642.156)	/	(1 - (4459.556 + 1864.979) / 8299.61)
	=	0.298313	/	0.237972
	=	1.2536

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
	=	7556.034	/	8550.624
	=	0.8837

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))
	=	(168.844 / (168.844 + 1864.979))	/	(156.875 / (156.875 + 2376.942))
	=	0.083018	/	0.061913
	=	1.3409

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)
	=	(683.83 / 7556.034)	/	(738.879 / 8550.624)
	=	0.090501	/	0.086412
	=	1.0473

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)
	=	((595.807 + 3009.038) / 9642.156)	/	((477.745 + 1962.324) / 8299.61)
	=	0.373863	/	0.293998
	=	1.2717

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
	=	(548.814 - 0	-	796.027)	/	9642.156
	=	-0.025639

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.

Kwong Lung Enterprise Co has a M-score of -2.59 suggests that the company is unlikely to be a manipulator.

Kwong Lung Enterprise Co Beneish M-Score Related Terms

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Kwong Lung Enterprise Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » Kwong Lung Enterprise Co Ltd (ROCO:8916) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 105, Dunhua South Road, 16th Floor, Section 2, Taipei, TWN, 10682

Website

https://www.klf-group.com

Kwong Lung Enterprise Co Ltd is engaged in manufacturing down feathers, bedding, garments, and sports jackets. The company products and services include Downing, Garment, Home Textile, and brand. It generates revenue through the production and sale of ready-made garments, down materials, and home textile products. The company's operating segments are the Apparel Department which Handles the manufacturing, development, design, and sales of apparel, Down Material Department which Focuses on the manufacturing, development, and sales of down materials. and Home Textile Department which Engages in manufacturing, development, design, and sales of bedding. It generates majority of the revenue from Apparel department segment.

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