Hanwha Investment & Securities 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 Hanwha Investment & Securities Co 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 * 1.0005 | + | 0.892 * 0.9202 | + | 0.115 * 0.9122 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.055 | + | 4.679 * 0.089437 | - | 0.327 * 1.1673 |
| = | -2.21 |
* 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 (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was ₩0 Mil.
Revenue was 96021.024 + 41457.345 + 65369.079 + 83877.206 = ₩286,725 Mil.
Gross Profit was 96021.024 + 41457.345 + 65369.079 + 83877.206 = ₩286,725 Mil.
Total Current Assets was ₩0 Mil.
Total Assets was ₩14,820,475 Mil.
Property, Plant and Equipment(Net PPE) was ₩52,621 Mil.
Depreciation, Depletion and Amortization(DDA) was ₩25,188 Mil.
Selling, General, & Admin. Expense(SGA) was ₩76,415 Mil.
Total Current Liabilities was ₩0 Mil.
Long-Term Debt & Capital Lease Obligation was ₩3,812,204 Mil.
Net Income was 76613.533 + -13263.331 + -14346.334 + 8946.831 = ₩57,951 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ₩0 Mil.
Cash Flow from Operations was -372886.394 + -1118508.828 + 464392.265 + -240546.447 = ₩-1,267,549 Mil.
|
Total Receivables was ₩0 Mil.
Revenue was 120308.679 + 51661.138 + 76256.287 + 63356.839 = ₩311,583 Mil.
Gross Profit was 120308.679 + 51661.138 + 76256.287 + 63356.839 = ₩311,583 Mil.
Total Current Assets was ₩0 Mil.
Total Assets was ₩14,144,778 Mil.
Property, Plant and Equipment(Net PPE) was ₩56,918 Mil.
Depreciation, Depletion and Amortization(DDA) was ₩23,852 Mil.
Selling, General, & Admin. Expense(SGA) was ₩78,712 Mil.
Total Current Liabilities was ₩0 Mil.
Long-Term Debt & Capital Lease Obligation was ₩3,117,055 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 / 286724.654) | / | (0 / 311582.943) |
| = | 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) |
| = | (311582.943 / 311582.943) | / | (286724.654 / 286724.654) |
| = | 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 + 52621.247) / 14820474.818) | / | (1 - (0 + 56917.542) / 14144777.75) |
| = | 0.996449 | / | 0.995976 |
| | = | 1.0005 |
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 |
| = | 286724.654 | / | 311582.943 |
| | = | 0.9202 |
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)) |
| = | (23851.782 / (23851.782 + 56917.542)) | / | (25188.21 / (25188.21 + 52621.247)) |
| = | 0.295307 | / | 0.323717 |
| | = | 0.9122 |
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) |
| = | (76415.47 / 286724.654) | / | (78711.609 / 311582.943) |
| = | 0.266512 | / | 0.252618 |
| | = | 1.055 |
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) |
| = | ((3812203.993 + 0) / 14820474.818) | / | ((3117055.194 + 0) / 14144777.75) |
| = | 0.257225 | / | 0.220368 |
| | = | 1.1673 |
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 |
| = | (57950.699 - 0 | - | -1267549.404) | / | 14820474.818 |
| | = | 0.089437 |
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.
Hanwha Investment & Securities Co has a M-score of -2.21 suggests that the company is unlikely to be a manipulator.
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