ZTO Express (Cayman) (ZTO Express (Cayman)) Beneish M-Score

: -2.83 (As of Today)

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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 -2.83 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for ZTO Express (Cayman)'s Beneish M-Score or its related term are showing as below:

ZTO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.02 Med: -2.29 Max: -1.49
Current: -2.83

During the past 10 years, the highest Beneish M-Score of ZTO Express (Cayman) was -1.49. The lowest was -3.02. And the median was -2.29.

ZTO Express (Cayman) Beneish M-Score Historical Data

The historical data trend for ZTO Express (Cayman)'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.

ZTO Express (Cayman) Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.42

-2.18

-2.29

-3.02

-2.83

ZTO Express (Cayman) Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-3.02	-3.09	-2.80	-2.57	-2.83

Competitive Comparison

For the Integrated Freight & Logistics subindustry, ZTO Express (Cayman)'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.

ZTO Express (Cayman) Beneish M-Score Distribution

For the Transportation industry and Industrials sector, ZTO Express (Cayman)'s Beneish M-Score distribution charts can be found below:

* The bar in red indicates where ZTO Express (Cayman)'s Beneish M-Score falls into.

ZTO Express (Cayman) 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 ZTO Express (Cayman) 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 * 0.9701

0.528 * 0.8385

0.404 * 1.0414

0.892 * 1.0317

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0732

4.679 * -0.055412

0.327 * 1.0315

-2.83

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $658 Mil.
Revenue was 1487.274 + 1243.634 + 1360.115 + 1303.638 = $5,395 Mil.
Gross Profit was 438.118 + 370.852 + 461.422 + 366.194 = $1,637 Mil.
Total Current Assets was $3,775 Mil.
Total Assets was $12,390 Mil.
Property, Plant and Equipment(Net PPE) was $4,601 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General, & Admin. Expense(SGA) was $342 Mil.
Total Current Liabilities was $2,810 Mil.
Long-Term Debt & Capital Lease Obligation was $1,048 Mil.
Net Income was 307.037 + 321.347 + 354.847 + 242.397 = $1,226 Mil.
Non Operating Income was -5.303 + 3.294 + 18.434 + 21.094 = $38 Mil.
Cash Flow from Operations was 549.464 + 402.596 + 525.261 + 397.332 = $1,875 Mil.

Total Receivables was $657 Mil.
Revenue was 1415.914 + 1274.299 + 1292.968 + 1245.792 = $5,229 Mil.
Gross Profit was 397.688 + 348.232 + 329.015 + 255.253 = $1,330 Mil.
Total Current Assets was $3,511 Mil.
Total Assets was $11,263 Mil.
Property, Plant and Equipment(Net PPE) was $4,249 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General, & Admin. Expense(SGA) was $309 Mil.
Total Current Liabilities was $2,353 Mil.
Long-Term Debt & Capital Lease Obligation was $1,047 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)
	=	(657.593 / 5394.661)	/	(657.035 / 5228.973)
	=	0.121897	/	0.125653
	=	0.9701

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)
	=	(1330.188 / 5228.973)	/	(1636.586 / 5394.661)
	=	0.254388	/	0.303371
	=	0.8385

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 - (3774.901 + 4601.162) / 12389.74)	/	(1 - (3510.625 + 4248.85) / 11263.191)
	=	0.323952	/	0.311077
	=	1.0414

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
	=	5394.661	/	5228.973
	=	1.0317

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))
	=	(0 / (0 + 4248.85))	/	(0 / (0 + 4601.162))
	=	0	/	0
	=	1

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)
	=	(342.126 / 5394.661)	/	(309.012 / 5228.973)
	=	0.063419	/	0.059096
	=	1.0732

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)
	=	((1048.35 + 2809.611) / 12389.74)	/	((1046.993 + 2353.131) / 11263.191)
	=	0.311384	/	0.301879
	=	1.0315

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
	=	(1225.628 - 37.519	-	1874.653)	/	12389.74
	=	-0.055412

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.

ZTO Express (Cayman) has a M-score of -2.83 suggests that the company is unlikely to be a manipulator.

ZTO Express (Cayman) Beneish M-Score Related Terms

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ZTO Express (Cayman) (ZTO Express (Cayman)) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » ZTO Express (Cayman) Inc (NYSE:ZTO) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

ZTO:Mexico 02057:Hong Kong 0A33:UK ZTOA:Germany Z1TO34:Brazil

Address

No. 1685 Huazhi Road, Building One, Qingpu District, Shanghai, CHN, 201708

Website

http://ir.zto.com

ZTO Express is China's largest express delivery company by parcel volume, with a volume share of 22.1% in 2022. It operates a network partner model where it provides line-haul transportation and sorting services, while its local network partners provide first-mile pickup and last-mile delivery services under the ZTO brand name. Headquartered in Shanghai, the company was founded in 2002 by Meisong Lai, who remains the Chairman, CEO, and its major shareholder with 77% voting rights as of June 30, 2023. ZTO's strategic shareholder is leading China e-commerce company, Alibaba Group, with around an 11.7% interest.