Freshworks Beneish M-Score Historical Data
The historical data trend for Freshworks'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.
Freshworks Beneish M-Score Chart
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Freshworks Annual Data
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Trend |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
Dec23 |
| Beneish M-Score |
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- |
- |
- |
-2.84 |
-2.95 |
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Freshworks Quarterly Data
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Dec19 |
Jun20 |
Sep20 |
Dec20 |
Mar21 |
Jun21 |
Sep21 |
Dec21 |
Mar22 |
Jun22 |
Sep22 |
Dec22 |
Mar23 |
Jun23 |
Sep23 |
Dec23 |
Mar24 |
| Beneish M-Score |
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-2.86 |
-2.95 |
-2.93 |
-2.95 |
-3.10 |
Competitive Comparison of Freshworks's Beneish M-Score
For the Software - Application subindustry, Freshworks'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.
Freshworks's Beneish M-Score Distribution in the Software Industry
For the Software industry and Technology sector, Freshworks's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Freshworks's Beneish M-Score falls into.
Freshworks 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 Freshworks for today is based on a combination of the following eight different indices:
| M | = | -4.84 | + | 0.92 * DSRI | + | 0.528 * GMI | + | 0.404 * AQI | + | 0.892 * SGI | + | 0.115 * DEPI |
| = | -4.84 | + | 0.92 * 0.9673 | + | 0.528 * 0.973 | + | 0.404 * 1.0058 | + | 0.892 * 1.1973 | + | 0.115 * 0.9381 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.8599 | + | 4.679 * -0.158491 | - | 0.327 * 1.0976 |
| = | -3.10 |
* 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.
| This Year (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was $84.3 Mil.
Revenue was 165.143 + 160.111 + 153.55 + 145.079 = $623.9 Mil.
Gross Profit was 139.253 + 133.102 + 127.287 + 120.218 = $519.9 Mil.
Total Current Assets was $1,367.1 Mil.
Total Assets was $1,467.4 Mil.
Property, Plant and Equipment(Net PPE) was $52.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $12.0 Mil.
Selling, General, & Admin. Expense(SGA) was $534.5 Mil.
Total Current Liabilities was $336.3 Mil.
Long-Term Debt & Capital Lease Obligation was $24.6 Mil.
Net Income was -23.325 + -28.081 + -31.033 + -35.658 = $-118.1 Mil.
Non Operating Income was -1.112 + 1.587 + -1.252 + -0.036 = $-0.8 Mil.
Cash Flow from Operations was 40.619 + 30.866 + 23.913 + 19.895 = $115.3 Mil.
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Total Receivables was $72.8 Mil.
Revenue was 137.692 + 133.17 + 128.76 + 121.432 = $521.1 Mil.
Gross Profit was 112.456 + 108.014 + 104.581 + 97.39 = $422.4 Mil.
Total Current Assets was $1,290.7 Mil.
Total Assets was $1,390.8 Mil.
Property, Plant and Equipment(Net PPE) was $55.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $11.6 Mil.
Selling, General, & Admin. Expense(SGA) was $519.1 Mil.
Total Current Liabilities was $285.5 Mil.
Long-Term Debt & Capital Lease Obligation was $26.2 Mil.
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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) |
| = | (84.324 / 623.883) | / | (72.807 / 521.054) |
| = | 0.13516 | / | 0.13973 |
| | = | 0.9673 |
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) |
| = | (422.441 / 521.054) | / | (519.86 / 623.883) |
| = | 0.810743 | / | 0.833265 |
| | = | 0.973 |
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 - (1367.109 + 52.807) / 1467.446) | / | (1 - (1290.664 + 55.389) / 1390.842) |
| = | 0.03239 | / | 0.032203 |
| | = | 1.0058 |
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 |
| = | 623.883 | / | 521.054 |
| | = | 1.1973 |
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)) |
| = | (11.643 / (11.643 + 55.389)) | / | (11.999 / (11.999 + 52.807)) |
| = | 0.173693 | / | 0.185153 |
| | = | 0.9381 |
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) |
| = | (534.509 / 623.883) | / | (519.113 / 521.054) |
| = | 0.856746 | / | 0.996275 |
| | = | 0.8599 |
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) |
| = | ((24.595 + 336.304) / 1467.446) | / | ((26.183 + 285.469) / 1390.842) |
| = | 0.245937 | / | 0.224074 |
| | = | 1.0976 |
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 |
| = | (-118.097 - -0.813 | - | 115.293) | / | 1467.446 |
| | = | -0.158491 |
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.
Freshworks has a M-score of -3.10 suggests that the company is unlikely to be a manipulator.
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