Sonam (NSE:SONAMLTD) Beneish M-Score : -0.97 (As of May. 31, 2024)

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What is Sonam 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 -0.97 higher than -1.78, which implies that the company might have manipulated its financial results.

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

NSE:SONAMLTD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.52 Med: -2.38 Max: -0.97
Current: -0.97

During the past 11 years, the highest Beneish M-Score of Sonam was -0.97. The lowest was -3.52. And the median was -2.38.

Sonam Beneish M-Score Historical Data

The historical data trend for Sonam'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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Sonam Beneish M-Score Chart

Sonam Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Beneish M-Score

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-2.22

-2.38

-2.32

-3.52

-0.97

Sonam Semi-Annual Data
	Mar13	Mar14	Mar15	Mar16	Mar17	Mar18	Mar19	Mar20	Mar21	Mar22	Mar23
Beneish M-Score	Get a 7-Day Free Trial						-2.22	-2.38	-2.32	-3.52	-0.97

Competitive Comparison of Sonam's Beneish M-Score

For the Furnishings, Fixtures & Appliances subindustry, Sonam'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.

Sonam's Beneish M-Score Distribution in the Furnishings, Fixtures & Appliances Industry

For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, Sonam's Beneish M-Score distribution charts can be found below:

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

Sonam 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 Sonam 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 * 1.39

0.528 * 1.0321

0.404 * 4.2315

0.892 * 0.9441

0.115 * 1.0549

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8158

4.679 * -0.04791

0.327 * 0.8115

-0.97

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Total Receivables was ₹76.3 Mil.
Revenue was ₹822.1 Mil.
Gross Profit was ₹184.1 Mil.
Total Current Assets was ₹316.0 Mil.
Total Assets was ₹857.6 Mil.
Property, Plant and Equipment(Net PPE) was ₹536.9 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹21.4 Mil.
Selling, General, & Admin. Expense(SGA) was ₹46.7 Mil.
Total Current Liabilities was ₹230.8 Mil.
Long-Term Debt & Capital Lease Obligation was ₹61.0 Mil.
Net Income was ₹40.0 Mil.
Gross Profit was ₹0.0 Mil.
Cash Flow from Operations was ₹81.1 Mil.

Total Receivables was ₹58.2 Mil.
Revenue was ₹870.7 Mil.
Gross Profit was ₹201.3 Mil.
Total Current Assets was ₹368.8 Mil.
Total Assets was ₹911.2 Mil.
Property, Plant and Equipment(Net PPE) was ₹541.2 Mil.
Depreciation, Depletion and Amortization(DDA) was ₹22.8 Mil.
Selling, General, & Admin. Expense(SGA) was ₹60.6 Mil.
Total Current Liabilities was ₹283.6 Mil.
Long-Term Debt & Capital Lease Obligation was ₹98.5 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)
	=	(76.343 / 822.057)	/	(58.174 / 870.713)
	=	0.092868	/	0.066812
	=	1.39

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)
	=	(201.254 / 870.713)	/	(184.103 / 822.057)
	=	0.231137	/	0.223954
	=	1.0321

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 - (315.973 + 536.871) / 857.642)	/	(1 - (368.791 + 541.164) / 911.16)
	=	0.005594	/	0.001322
	=	4.2315

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
	=	822.057	/	870.713
	=	0.9441

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))
	=	(22.82 / (22.82 + 541.164))	/	(21.413 / (21.413 + 536.871))
	=	0.040462	/	0.038355
	=	1.0549

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)
	=	(46.686 / 822.057)	/	(60.615 / 870.713)
	=	0.056792	/	0.069615
	=	0.8158

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)
	=	((60.97 + 230.848) / 857.642)	/	((98.482 + 283.551) / 911.16)
	=	0.340256	/	0.419282
	=	0.8115

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
	=	(40.016 - 0	-	81.106)	/	857.642
	=	-0.04791

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.

Sonam has a M-score of -0.97 signals that the company is likely to be a manipulator.

Sonam Beneish M-Score Related Terms

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Sonam (NSE:SONAMLTD) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Furnishings, Fixtures & Appliances » Sonam Ltd (NSE:SONAMLTD) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Morbi Rajkot Highway, Survey No. 337/p, District Morbi, Village Lajai, Taluka Tankara, Rajkot, GJ, IND, 363 641

Website

https://www.sonamquartz.com

Sonam Ltd Formerly Sonam Clock Ltd operates in the clock manufacturing industry. The company is engaged in the Manufacturing and Sale of Horological items, Clocks, Clock Movements, and related items. Geographically, it operates only in India. Some of its product includes alarm time piece clock, classy dial clock, designer clock, divine tune clock, lcd clock, led digital clock, light sensor clock and others. Its products are sold under the brand name of Sonam, ampm, and Lotus.

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