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Converge Technology Solutions (STU:0ZB) Beneish M-Score

: -2.91 (As of Today)
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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 -2.91 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Converge Technology Solutions's Beneish M-Score or its related term are showing as below:

STU:0ZB' s Beneish M-Score Range Over the Past 10 Years
Min: -2.91   Med: -2.25   Max: -1.85
Current: -2.91

During the past 6 years, the highest Beneish M-Score of Converge Technology Solutions was -1.85. The lowest was -2.91. And the median was -2.25.


Converge Technology Solutions Beneish M-Score Historical Data

The historical data trend for Converge Technology Solutions'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.

* Premium members only.

Converge Technology Solutions Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Premium Member Only - -2.27 -2.22 -1.85 -2.91

Converge Technology Solutions 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 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.85 -2.09 -2.30 -2.48 -2.91

Competitive Comparison

For the Information Technology Services subindustry, Converge Technology Solutions'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.


Converge Technology Solutions Beneish M-Score Distribution

For the Software industry and Technology sector, Converge Technology Solutions's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Converge Technology Solutions's Beneish M-Score falls into.



Converge Technology Solutions 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 Converge Technology Solutions 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 * 0.8637+0.528 * 0.98+0.404 * 1.0052+0.892 * 1.1862+0.115 * 0.7919
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0385+4.679 * -0.096611-0.327 * 1.0287
=-2.94

* 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 (Dec23) TTM:Last Year (Dec22) TTM:
Total Receivables was €557 Mil.
Revenue was 445.028 + 491.737 + 462.551 + 462.937 = €1,862 Mil.
Gross Profit was 124.077 + 120.555 + 122.042 + 117.126 = €484 Mil.
Total Current Assets was €741 Mil.
Total Assets was €1,472 Mil.
Property, Plant and Equipment(Net PPE) was €52 Mil.
Depreciation, Depletion and Amortization(DDA) was €83 Mil.
Selling, General, & Admin. Expense(SGA) was €375 Mil.
Total Current Liabilities was €710 Mil.
Long-Term Debt & Capital Lease Obligation was €258 Mil.
Net Income was 4.006 + -1.248 + -2.465 + -1.336 = €-1 Mil.
Non Operating Income was -5.476 + -1.683 + -4.698 + -4.609 = €-16 Mil.
Cash Flow from Operations was 78.249 + 66.438 + -6.701 + 19.634 = €158 Mil.
Total Receivables was €543 Mil.
Revenue was 445.369 + 389.557 + 380.643 + 354.335 = €1,570 Mil.
Gross Profit was 117.378 + 105.743 + 98.377 + 78.209 = €400 Mil.
Total Current Assets was €784 Mil.
Total Assets was €1,563 Mil.
Property, Plant and Equipment(Net PPE) was €61 Mil.
Depreciation, Depletion and Amortization(DDA) was €58 Mil.
Selling, General, & Admin. Expense(SGA) was €304 Mil.
Total Current Liabilities was €999 Mil.
Long-Term Debt & Capital Lease Obligation was €0 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)
=(556.537 / 1862.253) / (543.179 / 1569.904)
=0.298851 / 0.345995
=0.8637

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)
=(399.707 / 1569.904) / (483.8 / 1862.253)
=0.254606 / 0.259793
=0.98

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 - (741.162 + 51.597) / 1471.849) / (1 - (784.023 + 61.394) / 1562.708)
=0.461386 / 0.459005
=1.0052

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
=1862.253 / 1569.904
=1.1862

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))
=(58.38 / (58.38 + 61.394)) / (82.595 / (82.595 + 51.597))
=0.487418 / 0.615499
=0.7919

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)
=(375.025 / 1862.253) / (304.425 / 1569.904)
=0.201382 / 0.193913
=1.0385

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)
=((258.372 + 709.734) / 1471.849) / ((0 + 999.178) / 1562.708)
=0.657748 / 0.639389
=1.0287

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
=(-1.043 - -16.466 - 157.62) / 1471.849
=-0.096611

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.

Converge Technology Solutions has a M-score of -2.94 suggests that the company is unlikely to be a manipulator.


Converge Technology Solutions Beneish M-Score Related Terms

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Converge Technology Solutions (STU:0ZB) Business Description

Traded in Other Exchanges
Address
161 Bay Street, Suite 2325, Toronto, ON, CAN, M5J 2T6
Converge Technology Solutions Corp is a Canadian company building a platform of regionally focused Hybrid IT infrastructure providers that deliver best-of-breed solutions and services in the United States. The solutions provided include multi-cloud solutions, the blockchain, resiliency, and managed services, enabling the company to address the business and IT issues that public and private-sector organizations face.

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