Associate Global Partners (ASX:APL) Beneish M-Score : -2.20 (As of May. 24, 2024)

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What is Associate Global Partners Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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 -2.2 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Associate Global Partners's Beneish M-Score or its related term are showing as below:

ASX:APL' s Beneish M-Score Range Over the Past 10 Years
Min: -2.86 Med: -2.44 Max: -0.62
Current: -2.2

During the past 13 years, the highest Beneish M-Score of Associate Global Partners was -0.62. The lowest was -2.86. And the median was -2.44.

Associate Global Partners 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 Associate Global Partners 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 * 1.8116

0.528 * 1

0.404 * 0.9783

0.892 * 0.8974

0.115 * 1.7886

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.2752

4.679 * 0.013518

0.327 * 2.4594

-2.20

* 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 (Jun23) TTM:

Last Year (Jun22) TTM:

Total Receivables was A$2.00 Mil.
Revenue was A$4.82 Mil.
Gross Profit was A$4.82 Mil.
Total Current Assets was A$0.00 Mil.
Total Assets was A$13.09 Mil.
Property, Plant and Equipment(Net PPE) was A$0.51 Mil.
Depreciation, Depletion and Amortization(DDA) was A$0.11 Mil.
Selling, General, & Admin. Expense(SGA) was A$4.22 Mil.
Total Current Liabilities was A$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was A$1.59 Mil.
Net Income was A$-1.99 Mil.
Gross Profit was A$0.00 Mil.
Cash Flow from Operations was A$-2.16 Mil.

Total Receivables was A$1.23 Mil.
Revenue was A$5.37 Mil.
Gross Profit was A$5.37 Mil.
Total Current Assets was A$0.00 Mil.
Total Assets was A$13.21 Mil.
Property, Plant and Equipment(Net PPE) was A$0.23 Mil.
Depreciation, Depletion and Amortization(DDA) was A$0.11 Mil.
Selling, General, & Admin. Expense(SGA) was A$3.69 Mil.
Total Current Liabilities was A$0.00 Mil.
Long-Term Debt & Capital Lease Obligation was A$0.65 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)
	=	(2.003 / 4.821)	/	(1.232 / 5.372)
	=	0.415474	/	0.229337
	=	1.8116

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)
	=	(5.372 / 5.372)	/	(4.821 / 4.821)
	=	1	/	1
	=	1

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 - (0 + 0.505) / 13.094)	/	(1 - (0 + 0.228) / 13.214)
	=	0.961433	/	0.982746
	=	0.9783

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
	=	4.821	/	5.372
	=	0.8974

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))
	=	(0.112 / (0.112 + 0.228))	/	(0.114 / (0.114 + 0.505))
	=	0.329412	/	0.184168
	=	1.7886

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)
	=	(4.223 / 4.821)	/	(3.69 / 5.372)
	=	0.875959	/	0.686895
	=	1.2752

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)
	=	((1.589 + 0) / 13.094)	/	((0.652 + 0) / 13.214)
	=	0.121353	/	0.049342
	=	2.4594

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
	=	(-1.985 - 0	-	-2.162)	/	13.094
	=	0.013518

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.

Associate Global Partners has a M-score of -2.20 suggests that the company is unlikely to be a manipulator.

Associate Global Partners Beneish M-Score Related Terms

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Associate Global Partners (ASX:APL) Business Description

Industry

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Address

2 Chifley Square, Level 12, Sydney, NSW, AUS, 2000

Website

https://www.associateglobal.com

Associate Global Partners Ltd is an independent, multi-boutique asset management firm. The purpose of the company is to provide Australian investors with access to unique, world-class investment strategies that help them achieve financial objectives.