NEO Finance AB (OVSE:NEOFI) Beneish M-Score : -0.18 (As of May. 07, 2024)

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What is NEO Finance AB 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 -0.18 higher than -1.78, which implies that the company might have manipulated its financial results.

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

OVSE:NEOFI' s Beneish M-Score Range Over the Past 10 Years
Min: -1.71 Med: -0.95 Max: -0.18
Current: -0.18

During the past 7 years, the highest Beneish M-Score of NEO Finance AB was -0.18. The lowest was -1.71. And the median was -0.95.

NEO Finance AB Beneish M-Score Historical Data

The historical data trend for NEO Finance AB'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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NEO Finance AB Beneish M-Score Chart

NEO Finance AB Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-1.71

-0.18

NEO Finance AB Quarterly Data
	Dec17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial												-1.71	7.70	1.02	1.50	-0.18

Competitive Comparison of NEO Finance AB's Beneish M-Score

For the Credit Services subindustry, NEO Finance AB'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.

NEO Finance AB's Beneish M-Score Distribution in the Credit Services Industry

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

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

NEO Finance AB 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 NEO Finance AB 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 * 2.0071

0.528 * 1.0782

0.404 * 1.0832

0.892 * 1.3105

0.115 * 0.9575

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9245

4.679 * 0.221209

0.327 * 1.0598

-0.18

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €1.76 Mil.
Revenue was 1.336 + 1.182 + 1.094 + 1.014 = €4.63 Mil.
Gross Profit was 0.563 + 0.629 + 0.561 + 0.532 = €2.29 Mil.
Total Current Assets was €22.24 Mil.
Total Assets was €27.40 Mil.
Property, Plant and Equipment(Net PPE) was €0.03 Mil.
Depreciation, Depletion and Amortization(DDA) was €0.33 Mil.
Selling, General, & Admin. Expense(SGA) was €0.71 Mil.
Total Current Liabilities was €20.48 Mil.
Long-Term Debt & Capital Lease Obligation was €4.10 Mil.
Net Income was -0.023 + 0.112 + 0.1 + 0.072 = €0.26 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0.00 Mil.
Cash Flow from Operations was 0 + -2.41 + -0.893 + -2.498 = €-5.80 Mil.

Total Receivables was €0.67 Mil.
Revenue was 1.052 + 0.933 + -1.985 + 3.53 = €3.53 Mil.
Gross Profit was 0.607 + 0.502 + -1.109 + 1.88 = €1.88 Mil.
Total Current Assets was €14.15 Mil.
Total Assets was €17.14 Mil.
Property, Plant and Equipment(Net PPE) was €0.03 Mil.
Depreciation, Depletion and Amortization(DDA) was €0.24 Mil.
Selling, General, & Admin. Expense(SGA) was €0.59 Mil.
Total Current Liabilities was €13.64 Mil.
Long-Term Debt & Capital Lease Obligation was €0.87 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)
	=	(1.757 / 4.626)	/	(0.668 / 3.53)
	=	0.37981	/	0.189235
	=	2.0071

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)
	=	(1.88 / 3.53)	/	(2.285 / 4.626)
	=	0.532578	/	0.493947
	=	1.0782

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 - (22.243 + 0.025) / 27.404)	/	(1 - (14.146 + 0.03) / 17.142)
	=	0.187418	/	0.173025
	=	1.0832

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
	=	4.626	/	3.53
	=	1.3105

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))
	=	(0.241 / (0.241 + 0.03))	/	(0.326 / (0.326 + 0.025))
	=	0.889299	/	0.928775
	=	0.9575

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)
	=	(0.71 / 4.626)	/	(0.586 / 3.53)
	=	0.15348	/	0.166006
	=	0.9245

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)
	=	((4.1 + 20.477) / 27.404)	/	((0.865 + 13.641) / 17.142)
	=	0.89684	/	0.846226
	=	1.0598

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
	=	(0.261 - 0	-	-5.801)	/	27.404
	=	0.221209

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.

NEO Finance AB has a M-score of -0.18 signals that the company is likely to be a manipulator.

NEO Finance AB Beneish M-Score Related Terms

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NEO Finance AB (OVSE:NEOFI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » NEO Finance AB (OVSE:NEOFI) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

A. Vivulskio Street 7, Vilnius, LTU, LT-03162

Website

https://www.neofinance.com

NEO Finance AB is engaged in peer-to-peer lending services. It owns and operates a Peer-to-peer lending platform that enables retail Lenders to lend money directly to retail borrowers. The company generates its revenues via the lending platform in two main ways: intermediary fee charged from borrowers on installments made and by interest made by co-investing with lenders.

NEO Finance AB (OVSE:NEOFI) Headlines

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