Jiangsu Hongdou Industry Co (SHSE:600400) Beneish M-Score : -2.94 (As of May. 15, 2024)

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What is Jiangsu Hongdou Industry Co 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.

Good Sign:

Beneish M-Score -2.94 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

SHSE:600400' s Beneish M-Score Range Over the Past 10 Years
Min: -3.57 Med: -2.48 Max: 1.48
Current: -2.94

During the past 13 years, the highest Beneish M-Score of Jiangsu Hongdou Industry Co was 1.48. The lowest was -3.57. And the median was -2.48.

Jiangsu Hongdou Industry Co Beneish M-Score Historical Data

The historical data trend for Jiangsu Hongdou Industry Co'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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Jiangsu Hongdou Industry Co Beneish M-Score Chart

Jiangsu Hongdou Industry Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.53

-2.31

-2.47

-2.55

-3.16

Jiangsu Hongdou Industry Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.68	-2.95	-2.87	-3.16	-2.94

Competitive Comparison of Jiangsu Hongdou Industry Co's Beneish M-Score

For the Apparel Manufacturing subindustry, Jiangsu Hongdou Industry Co'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.

Jiangsu Hongdou Industry Co's Beneish M-Score Distribution in the Manufacturing - Apparel & Accessories Industry

For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, Jiangsu Hongdou Industry Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Jiangsu Hongdou Industry Co's Beneish M-Score falls into.

Jiangsu Hongdou Industry Co 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 Jiangsu Hongdou Industry Co 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 * 0.964

0.528 * 0.9207

0.404 * 0.8474

0.892 * 0.9884

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.043

4.679 * -0.052436

0.327 * 1.1861

-2.94

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was ¥664 Mil.
Revenue was 650.335 + 774.142 + 460.208 + 440.886 = ¥2,326 Mil.
Gross Profit was 265.26 + 269.546 + 169.276 + 163.552 = ¥868 Mil.
Total Current Assets was ¥2,260 Mil.
Total Assets was ¥5,095 Mil.
Property, Plant and Equipment(Net PPE) was ¥1,082 Mil.
Depreciation, Depletion and Amortization(DDA) was ¥0 Mil.
Selling, General, & Admin. Expense(SGA) was ¥694 Mil.
Total Current Liabilities was ¥1,637 Mil.
Long-Term Debt & Capital Lease Obligation was ¥381 Mil.
Net Income was 41.234 + -9.195 + -7.729 + 15.472 = ¥40 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ¥0 Mil.
Cash Flow from Operations was -107.426 + 462.252 + -31.475 + -16.427 = ¥307 Mil.

Total Receivables was ¥697 Mil.
Revenue was 655.098 + 674.19 + 541.553 + 482.045 = ¥2,353 Mil.
Gross Profit was 244.165 + 227.885 + 165.795 + 170.406 = ¥808 Mil.
Total Current Assets was ¥1,851 Mil.
Total Assets was ¥4,659 Mil.
Property, Plant and Equipment(Net PPE) was ¥917 Mil.
Depreciation, Depletion and Amortization(DDA) was ¥0 Mil.
Selling, General, & Admin. Expense(SGA) was ¥673 Mil.
Total Current Liabilities was ¥1,365 Mil.
Long-Term Debt & Capital Lease Obligation was ¥192 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)
	=	(664.153 / 2325.571)	/	(697.066 / 2352.886)
	=	0.285587	/	0.29626
	=	0.964

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)
	=	(808.251 / 2352.886)	/	(867.634 / 2325.571)
	=	0.343515	/	0.373084
	=	0.9207

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 - (2260.128 + 1081.992) / 5094.647)	/	(1 - (1850.546 + 917.327) / 4659.321)
	=	0.343994	/	0.405949
	=	0.8474

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
	=	2325.571	/	2352.886
	=	0.9884

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 + 917.327))	/	(0 / (0 + 1081.992))
	=	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)
	=	(693.506 / 2325.571)	/	(672.739 / 2352.886)
	=	0.298209	/	0.285921
	=	1.043

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)
	=	((381.411 + 1636.881) / 5094.647)	/	((191.538 + 1364.727) / 4659.321)
	=	0.396159	/	0.334011
	=	1.1861

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
	=	(39.782 - 0	-	306.924)	/	5094.647
	=	-0.052436

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.

Jiangsu Hongdou Industry Co has a M-score of -2.94 suggests that the company is unlikely to be a manipulator.

Jiangsu Hongdou Industry Co Beneish M-Score Related Terms

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Jiangsu Hongdou Industry Co (SHSE:600400) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » Jiangsu Hongdou Industry Co Ltd (SHSE:600400) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Donggang Town, Xishan District, Jiangsu Province, Wuxi, CHN, 214199

Website

http://www.hongdou.com.cn

Jiangsu Hongdou Industry Co Ltd produces and sells clothing, knitwear and nylon yarn. It is also involved in design, development, and sales of smart wearable devices; shoes, hats, and leather goods , Luggage, eyewear; sales of sanitary ware, daily necessities, cosmetics, hygiene products, stationery, sporting goods, arts and crafts, food, household appliances, electronics, furniture, props, lamps, audio equipment; and books and periodicals.

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