Centrepoint Alliance (ASX:CAF) Beneish M-Score : 2.54 (As of May. 28, 2024)

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What is Centrepoint Alliance 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.

Warning Sign:

Beneish M-Score 2.54 higher than -1.78, which implies that the company might have manipulated its financial results.

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

ASX:CAF' s Beneish M-Score Range Over the Past 10 Years
Min: -2.77 Med: -2.36 Max: 2.54
Current: 2.54

During the past 13 years, the highest Beneish M-Score of Centrepoint Alliance was 2.54. The lowest was -2.77. And the median was -2.36.

Centrepoint Alliance 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 Centrepoint Alliance 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 * 7.8384

0.528 * 1

0.404 * 1.042

0.892 * 0.1464

0.115 * 0.5656

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 6.6207

4.679 * 0.045934

0.327 * 0.1605

2.54

* 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 (Jun23) TTM:

Last Year (Jun22) TTM:

Total Receivables was A$6.21 Mil.
Revenue was A$32.58 Mil.
Gross Profit was A$32.58 Mil.
Total Current Assets was A$0.00 Mil.
Total Assets was A$48.11 Mil.
Property, Plant and Equipment(Net PPE) was A$1.01 Mil.
Depreciation, Depletion and Amortization(DDA) was A$2.09 Mil.
Selling, General, & Admin. Expense(SGA) was A$21.13 Mil.
Total Current Liabilities was A$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was A$0.32 Mil.
Net Income was A$6.34 Mil.
Gross Profit was A$0.00 Mil.
Cash Flow from Operations was A$4.13 Mil.

Total Receivables was A$5.41 Mil.
Revenue was A$222.48 Mil.
Gross Profit was A$222.48 Mil.
Total Current Assets was A$0.00 Mil.
Total Assets was A$49.34 Mil.
Property, Plant and Equipment(Net PPE) was A$2.98 Mil.
Depreciation, Depletion and Amortization(DDA) was A$1.84 Mil.
Selling, General, & Admin. Expense(SGA) was A$21.80 Mil.
Total Current Liabilities was A$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was A$2.01 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)
	=	(6.205 / 32.578)	/	(5.406 / 222.477)
	=	0.190466	/	0.024299
	=	7.8384

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)
	=	(222.477 / 222.477)	/	(32.578 / 32.578)
	=	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 + 1.013) / 48.113)	/	(1 - (0 + 2.984) / 49.341)
	=	0.978945	/	0.939523
	=	1.042

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
	=	32.578	/	222.477
	=	0.1464

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))
	=	(1.837 / (1.837 + 2.984))	/	(2.091 / (2.091 + 1.013))
	=	0.381041	/	0.673647
	=	0.5656

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)
	=	(21.131 / 32.578)	/	(21.796 / 222.477)
	=	0.648628	/	0.09797
	=	6.6207

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)
	=	((0.315 + 0) / 48.113)	/	((2.013 + 0) / 49.341)
	=	0.006547	/	0.040798
	=	0.1605

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
	=	(6.339 - 0	-	4.129)	/	48.113
	=	0.045934

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.

Centrepoint Alliance has a M-score of 2.54 signals that the company is likely to be a manipulator.

Centrepoint Alliance Beneish M-Score Related Terms

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Centrepoint Alliance (ASX:CAF) Business Description

Industry

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Traded in Other Exchanges

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Address

Level 8, 309 George Street, Sydney, NSW, AUS, 2000

Website

https://www.centrepointalliance.com.au

Centrepoint Alliance Ltd is a community of financial advisers. It provides technology, services, education, and on-the-ground training to its clients. The company's reportable segments are Licensee and Advice Services which generates maximum revenue for the company provides Australian Financial Services Licence-related services to financial advisers and its clients and mortgage broking services; Funds Management and Administration segment provides investor-directed portfolio services and investment management services to financial advisers and their clients; Consulting services segment represents the business that provides consulting to both self-licenced advisers and licensees.