LFG Investment Holdings (HKSE:03938) Beneish M-Score : -0.11 (As of May. 10, 2024)

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What is LFG Investment Holdings 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 -0.11 higher than -1.78, which implies that the company might have manipulated its financial results.

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

HKSE:03938' s Beneish M-Score Range Over the Past 10 Years
Min: -1.22 Med: -0.11 Max: 3.02
Current: -0.11

During the past 7 years, the highest Beneish M-Score of LFG Investment Holdings was 3.02. The lowest was -1.22. And the median was -0.11.

LFG Investment Holdings Beneish M-Score Historical Data

The historical data trend for LFG Investment Holdings'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.

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LFG Investment Holdings Beneish M-Score Chart

LFG Investment Holdings Annual Data

Trend

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Beneish M-Score

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1.21

3.02

-1.01

-1.22

-0.11

LFG Investment Holdings Semi-Annual Data
	Mar17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Beneish M-Score	Get a 7-Day Free Trial								-	-1.22	-	-0.11	-

Competitive Comparison of LFG Investment Holdings's Beneish M-Score

For the Capital Markets subindustry, LFG Investment Holdings'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.

LFG Investment Holdings's Beneish M-Score Distribution in the Capital Markets Industry

For the Capital Markets industry and Financial Services sector, LFG Investment Holdings's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where LFG Investment Holdings's Beneish M-Score falls into.

LFG Investment Holdings 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 LFG Investment Holdings 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 * 1.7768

0.528 * 5.0296

0.404 * 1.2177

0.892 * 0.5998

0.115 * 0.6904

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1

4.679 * -0.038653

0.327 * 0.949

-0.11

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Total Receivables was HK$141.20 Mil.
Revenue was HK$46.87 Mil.
Gross Profit was HK$3.56 Mil.
Total Current Assets was HK$249.04 Mil.
Total Assets was HK$261.58 Mil.
Property, Plant and Equipment(Net PPE) was HK$7.44 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$6.23 Mil.
Selling, General, & Admin. Expense(SGA) was HK$0.00 Mil.
Total Current Liabilities was HK$113.21 Mil.
Long-Term Debt & Capital Lease Obligation was HK$0.24 Mil.
Net Income was HK$-22.68 Mil.
Gross Profit was HK$0.00 Mil.
Cash Flow from Operations was HK$-12.57 Mil.

Total Receivables was HK$132.48 Mil.
Revenue was HK$78.15 Mil.
Gross Profit was HK$29.85 Mil.
Total Current Assets was HK$295.32 Mil.
Total Assets was HK$314.02 Mil.
Property, Plant and Equipment(Net PPE) was HK$13.67 Mil.
Depreciation, Depletion and Amortization(DDA) was HK$6.27 Mil.
Selling, General, & Admin. Expense(SGA) was HK$0.00 Mil.
Total Current Liabilities was HK$138.01 Mil.
Long-Term Debt & Capital Lease Obligation was HK$5.50 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)
	=	(141.198 / 46.873)	/	(132.482 / 78.145)
	=	3.012353	/	1.695336
	=	1.7768

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)
	=	(29.851 / 78.145)	/	(3.56 / 46.873)
	=	0.381995	/	0.07595
	=	5.0296

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 - (249.04 + 7.442) / 261.583)	/	(1 - (295.32 + 13.668) / 314.017)
	=	0.019501	/	0.016015
	=	1.2177

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
	=	46.873	/	78.145
	=	0.5998

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))
	=	(6.271 / (6.271 + 13.668))	/	(6.226 / (6.226 + 7.442))
	=	0.314509	/	0.455517
	=	0.6904

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)
	=	(0 / 46.873)	/	(0 / 78.145)
	=	0	/	0
	=	1

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)
	=	((0.242 + 113.209) / 261.583)	/	((5.498 + 138.007) / 314.017)
	=	0.433709	/	0.456998
	=	0.949

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
	=	(-22.684 - 0	-	-12.573)	/	261.583
	=	-0.038653

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.

LFG Investment Holdings has a M-score of -0.11 signals that the company is likely to be a manipulator.

LFG Investment Holdings Beneish M-Score Related Terms

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LFG Investment Holdings (HKSE:03938) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » LFG Investment Holdings Ltd (HKSE:03938) » Definitions » Beneish M-Score

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Traded in Other Exchanges

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Address

29 Queen’s Road Central, Room 1601, 16th Floor China Building, Hong Kong, HKG

Website

https://www.legogroup.hk/en/index.php

LFG Investment Holdings Ltd is a financial services provider in Hong Kong, that engages in the provision of corporate finance advisory services; underwriting services; securities dealing and brokerage services; securities financing services; and asset management services. The company generates maximum revenue from Corporate finance advisory services.

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