IEIT Systems Co (SZSE:000977) Beneish M-Score : -1.68 (As of May. 16, 2024)

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What is IEIT Systems 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.

Warning Sign:

Beneish M-Score -1.68 higher than -1.78, which implies that the company might have manipulated its financial results.

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

SZSE:000977' s Beneish M-Score Range Over the Past 10 Years
Min: -4.49 Med: -1.89 Max: 0.44
Current: -1.68

During the past 13 years, the highest Beneish M-Score of IEIT Systems Co was 0.44. The lowest was -4.49. And the median was -1.89.

IEIT Systems Co Beneish M-Score Historical Data

The historical data trend for IEIT Systems 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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IEIT Systems Co Beneish M-Score Chart

IEIT Systems Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-1.68

-2.73

-1.28

-2.35

-2.53

IEIT Systems 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															-4.49	-3.14	-2.43	-2.53	-1.68

Competitive Comparison of IEIT Systems Co's Beneish M-Score

For the Computer Hardware subindustry, IEIT Systems 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.

IEIT Systems Co's Beneish M-Score Distribution in the Hardware Industry

For the Hardware industry and Technology sector, IEIT Systems Co's Beneish M-Score distribution charts can be found below:

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

IEIT Systems 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 IEIT Systems 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 * 1.0168

0.528 * 1.234

0.404 * 1.0245

0.892 * 1.1958

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.8268

4.679 * 0.096279

0.327 * 1.0211

-1.68

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was ¥11,736 Mil.
Revenue was 17606.575 + 17770.225 + 23298.763 + 15296.963 = ¥73,973 Mil.
Gross Profit was 1422.329 + 1963.268 + 1822.074 + 1621.956 = ¥6,830 Mil.
Total Current Assets was ¥46,231 Mil.
Total Assets was ¥49,961 Mil.
Property, Plant and Equipment(Net PPE) was ¥2,234 Mil.
Depreciation, Depletion and Amortization(DDA) was ¥0 Mil.
Selling, General, & Admin. Expense(SGA) was ¥1,596 Mil.
Total Current Liabilities was ¥23,123 Mil.
Long-Term Debt & Capital Lease Obligation was ¥7,807 Mil.
Net Income was 306.459 + 996.158 + 461.336 + 138.868 = ¥1,903 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ¥0 Mil.
Cash Flow from Operations was -3484.866 + 6128.288 + -427.596 + -5123.183 = ¥-2,907 Mil.

Total Receivables was ¥9,652 Mil.
Revenue was 9500.637 + 16868.634 + 17916.498 + 17573.302 = ¥61,859 Mil.
Gross Profit was 1204.997 + 1433.056 + 2046.752 + 2363.148 = ¥7,048 Mil.
Total Current Assets was ¥42,899 Mil.
Total Assets was ¥46,337 Mil.
Property, Plant and Equipment(Net PPE) was ¥2,084 Mil.
Depreciation, Depletion and Amortization(DDA) was ¥0 Mil.
Selling, General, & Admin. Expense(SGA) was ¥1,615 Mil.
Total Current Liabilities was ¥18,797 Mil.
Long-Term Debt & Capital Lease Obligation was ¥9,296 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)
	=	(11736.325 / 73972.526)	/	(9652.298 / 61859.071)
	=	0.158658	/	0.156037
	=	1.0168

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)
	=	(7047.953 / 61859.071)	/	(6829.627 / 73972.526)
	=	0.113936	/	0.092327
	=	1.234

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 - (46230.743 + 2234.032) / 49960.857)	/	(1 - (42899.058 + 2083.963) / 46337.365)
	=	0.029945	/	0.029228
	=	1.0245

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
	=	73972.526	/	61859.071
	=	1.1958

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 + 2083.963))	/	(0 / (0 + 2234.032))
	=	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)
	=	(1596.377 / 73972.526)	/	(1614.627 / 61859.071)
	=	0.021581	/	0.026102
	=	0.8268

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)
	=	((7806.85 + 23122.671) / 49960.857)	/	((9295.7 + 18796.856) / 46337.365)
	=	0.619075	/	0.606261
	=	1.0211

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
	=	(1902.821 - 0	-	-2907.357)	/	49960.857
	=	0.096279

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.

IEIT Systems Co has a M-score of -1.68 signals that the company is likely to be a manipulator.

IEIT Systems Co Beneish M-Score Related Terms

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IEIT Systems Co (SZSE:000977) Business Description

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Address

1036 Langchao Road, Shandong Province, Jinan, CHN, 250101

Website

http://www.inspur.com

IEIT Systems Co Ltd formerly Inspur Electronic Information Industry Co Ltd is a China-based cloud computing, big data service provider. It is engaged in providing cloud computing solutions and services at IaaS, PaaS and SaaS levels. Its products include rack servers, blade systems, mission-critical systems, storage devices, mainframe security products and others. The company assists customers to build platforms underpinned by cloud computing infrastructure and based on its information software for governments, enterprises, and industries, terminal products, and solutions, the company support governments, enterprises, and industries in cloud construction. The company ships its IT products and services internationally.

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