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Renta 4 Banco (XMAD:R4) Beneish M-Score : -3.10 (As of Dec. 14, 2024)


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What is Renta 4 Banco Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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 -3.1 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Renta 4 Banco's Beneish M-Score or its related term are showing as below:

XMAD:R4' s Beneish M-Score Range Over the Past 10 Years
Min: -92.72   Med: -2.45   Max: -1.76
Current: -3.1

During the past 13 years, the highest Beneish M-Score of Renta 4 Banco was -1.76. The lowest was -92.72. And the median was -2.45.


Renta 4 Banco 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 Renta 4 Banco 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 * 0.9969+0.892 * 1.187+0.115 * 0.9227
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8799+4.679 * -0.155278-0.327 * 1.2089
=-3.10

* 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 €0.0 Mil.
Revenue was €131.5 Mil.
Gross Profit was €131.5 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €2,190.2 Mil.
Property, Plant and Equipment(Net PPE) was €59.1 Mil.
Depreciation, Depletion and Amortization(DDA) was €11.3 Mil.
Selling, General, & Admin. Expense(SGA) was €22.4 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €24.0 Mil.
Net Income was €26.1 Mil.
Gross Profit was €0.0 Mil.
Cash Flow from Operations was €366.2 Mil.
Total Receivables was €0.0 Mil.
Revenue was €110.8 Mil.
Gross Profit was €110.8 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €2,410.3 Mil.
Property, Plant and Equipment(Net PPE) was €57.8 Mil.
Depreciation, Depletion and Amortization(DDA) was €10.0 Mil.
Selling, General, & Admin. Expense(SGA) was €21.5 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €21.8 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 / 131.543) / (0 / 110.818)
=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)
=(110.818 / 110.818) / (131.543 / 131.543)
=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 + 59.089) / 2190.176) / (1 - (0 + 57.847) / 2410.341)
=0.973021 / 0.976
=0.9969

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
=131.543 / 110.818
=1.187

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))
=(10.038 / (10.038 + 57.847)) / (11.276 / (11.276 + 59.089))
=0.147868 / 0.16025
=0.9227

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)
=(22.43 / 131.543) / (21.475 / 110.818)
=0.170515 / 0.193786
=0.8799

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)
=((23.951 + 0) / 2190.176) / ((21.803 + 0) / 2410.341)
=0.010936 / 0.009046
=1.2089

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
=(26.127 - 0 - 366.213) / 2190.176
=-0.155278

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.

Renta 4 Banco has a M-score of -3.10 suggests that the company is unlikely to be a manipulator.


Renta 4 Banco Beneish M-Score Related Terms

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Renta 4 Banco Business Description

Traded in Other Exchanges
Address
Paseo de la Habana 74, Madrid, ESP, 28036
Renta 4 Banco SA is an asset management company providing wealth management, brokerage services, and corporate advisory services. It operates through a network of branches, agents, and subsidiaries spread widely across Spain and offers services to individuals and financial intermediaries, and small and medium-sized enterprises. Its activities include the provision of investment services, and the acquisition, holding, exploitation, administration, and disposal of all manner of transferable securities. It has three businesses as a reportable segment Intermediation, Portfolio, and asset management and advice, and Corporate Services.