Hotai Finance Co (TPE:6592) Beneish M-Score : -1.52 (As of May. 13, 2024)

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What is Hotai Finance 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.

Warning Sign:

Beneish M-Score -1.52 higher than -1.78, which implies that the company might have manipulated its financial results.

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

TPE:6592' s Beneish M-Score Range Over the Past 10 Years
Min: -1.77 Med: -1.41 Max: -1.1
Current: -1.52

During the past 8 years, the highest Beneish M-Score of Hotai Finance Co was -1.10. The lowest was -1.77. And the median was -1.41.

Hotai Finance Co Beneish M-Score Historical Data

The historical data trend for Hotai Finance 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.

* Premium members only.

Hotai Finance Co Beneish M-Score Chart

Hotai Finance Co Annual Data

Trend

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-1.67

-1.70

-1.32

-1.19

-1.32

Hotai Finance Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-1.12	-1.10	-1.16	-1.32	-1.52

Competitive Comparison of Hotai Finance Co's Beneish M-Score

For the Credit Services subindustry, Hotai Finance 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.

Hotai Finance Co's Beneish M-Score Distribution in the Credit Services Industry

For the Credit Services industry and Financial Services sector, Hotai Finance Co's Beneish M-Score distribution charts can be found below:

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

Hotai Finance 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 Hotai Finance 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 * 0.9554

0.528 * 1.076

0.404 * 1.2037

0.892 * 1.2364

0.115 * 1.2169

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8336

4.679 * 0.131617

0.327 * 0.9969

-1.52

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was NT$279,021 Mil.
Revenue was 7783.711 + 7672.27 + 7503.161 + 6920.367 = NT$29,880 Mil.
Gross Profit was 4538.264 + 4395.866 + 4321.956 + 4027.417 = NT$17,284 Mil.
Total Current Assets was NT$291,597 Mil.
Total Assets was NT$320,676 Mil.
Property, Plant and Equipment(Net PPE) was NT$10,018 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$1,537 Mil.
Selling, General, & Admin. Expense(SGA) was NT$8,266 Mil.
Total Current Liabilities was NT$279,145 Mil.
Long-Term Debt & Capital Lease Obligation was NT$1,765 Mil.
Net Income was 839.883 + 898.537 + 1005.245 + 886.849 = NT$3,631 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = NT$0 Mil.
Cash Flow from Operations was -3356.509 + -8979.46 + -13588.216 + -12651.803 = NT$-38,576 Mil.

Total Receivables was NT$236,212 Mil.
Revenue was 6564.637 + 6225.599 + 5914.182 + 5462.843 = NT$24,167 Mil.
Gross Profit was 3947.859 + 3822.495 + 3731.378 + 3539.747 = NT$15,041 Mil.
Total Current Assets was NT$247,911 Mil.
Total Assets was NT$268,569 Mil.
Property, Plant and Equipment(Net PPE) was NT$7,397 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$1,429 Mil.
Selling, General, & Admin. Expense(SGA) was NT$8,020 Mil.
Total Current Liabilities was NT$235,256 Mil.
Long-Term Debt & Capital Lease Obligation was NT$744 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)
	=	(279020.684 / 29879.509)	/	(236211.71 / 24167.261)
	=	9.338195	/	9.774037
	=	0.9554

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)
	=	(15041.479 / 24167.261)	/	(17283.503 / 29879.509)
	=	0.622391	/	0.57844
	=	1.076

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 - (291597.334 + 10018.056) / 320675.932)	/	(1 - (247910.622 + 7396.818) / 268569.171)
	=	0.059439	/	0.049379
	=	1.2037

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
	=	29879.509	/	24167.261
	=	1.2364

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))
	=	(1428.635 / (1428.635 + 7396.818))	/	(1537.105 / (1537.105 + 10018.056))
	=	0.161877	/	0.133023
	=	1.2169

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)
	=	(8266.217 / 29879.509)	/	(8020.35 / 24167.261)
	=	0.276652	/	0.331868
	=	0.8336

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)
	=	((1764.626 + 279144.753) / 320675.932)	/	((744.181 + 235255.633) / 268569.171)
	=	0.875991	/	0.87873
	=	0.9969

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
	=	(3630.514 - 0	-	-38575.988)	/	320675.932
	=	0.131617

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.

Hotai Finance Co has a M-score of -1.52 signals that the company is likely to be a manipulator.

Hotai Finance Co Beneish M-Score Related Terms

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Hotai Finance Co (TPE:6592) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Hotai Finance Co Ltd (TPE:6592) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

No.605, Ruiguang Road, 10th Floor, Neihu District, Taipei, TWN, 114

Website

https://www.hfcfinance.com.tw

Hotai Finance Co Ltd is a Taiwan-based full-service financing company. It is engaged in installment sales and leases of vehicles and equipment. The company offers products and services such as an Installment loan for a new car, used car, motorcycle and scooter, and others. Geographically, the firm operates in China and Taiwan. It generates a most of revenue from interest income.

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