Embark Early Education (ASX:EVO) Beneish M-Score : -4.13 (As of May. 23, 2024)

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What is Embark Early Education 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 -4.13 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Embark Early Education's Beneish M-Score or its related term are showing as below:

ASX:EVO' s Beneish M-Score Range Over the Past 10 Years
Min: -6.99 Med: -4.13 Max: -2.52
Current: -4.13

During the past 8 years, the highest Beneish M-Score of Embark Early Education was -2.52. The lowest was -6.99. And the median was -4.13.

Embark Early Education Beneish M-Score Historical Data

The historical data trend for Embark Early Education'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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Embark Early Education Beneish M-Score Chart

Embark Early Education Annual Data

Trend

Mar16

Mar17

Mar18

Mar19

Mar20

Dec21

Dec22

Dec23

Beneish M-Score

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-6.99

-6.63

-3.02

-4.13

Embark Early Education Semi-Annual Data
	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Beneish M-Score	Get a 7-Day Free Trial												-	-	-3.02	-	-4.13

Competitive Comparison of Embark Early Education's Beneish M-Score

For the Education & Training Services subindustry, Embark Early Education'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.

Embark Early Education's Beneish M-Score Distribution in the Education Industry

For the Education industry and Consumer Defensive sector, Embark Early Education's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Embark Early Education's Beneish M-Score falls into.

Embark Early Education 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 Embark Early Education 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 * 0.7364

0.528 * 0.8878

0.404 * 0.9151

0.892 * 0.9514

0.115 * 3.3629

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9627

4.679 * -0.331458

0.327 * 0.9975

-4.13

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was A$1.72 Mil.
Revenue was A$17.74 Mil.
Gross Profit was A$12.83 Mil.
Total Current Assets was A$27.45 Mil.
Total Assets was A$149.45 Mil.
Property, Plant and Equipment(Net PPE) was A$58.49 Mil.
Depreciation, Depletion and Amortization(DDA) was A$3.04 Mil.
Selling, General, & Admin. Expense(SGA) was A$33.24 Mil.
Total Current Liabilities was A$14.12 Mil.
Long-Term Debt & Capital Lease Obligation was A$62.24 Mil.
Net Income was A$7.69 Mil.
Gross Profit was A$40.76 Mil.
Cash Flow from Operations was A$16.47 Mil.

Total Receivables was A$2.46 Mil.
Revenue was A$18.65 Mil.
Gross Profit was A$11.97 Mil.
Total Current Assets was A$19.89 Mil.
Total Assets was A$157.77 Mil.
Property, Plant and Equipment(Net PPE) was A$64.62 Mil.
Depreciation, Depletion and Amortization(DDA) was A$12.86 Mil.
Selling, General, & Admin. Expense(SGA) was A$36.29 Mil.
Total Current Liabilities was A$14.67 Mil.
Long-Term Debt & Capital Lease Obligation was A$66.15 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)
	=	(1.72 / 17.742)	/	(2.455 / 18.649)
	=	0.096945	/	0.131642
	=	0.7364

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)
	=	(11.974 / 18.649)	/	(12.831 / 17.742)
	=	0.642072	/	0.723199
	=	0.8878

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 - (27.453 + 58.49) / 149.446)	/	(1 - (19.892 + 64.617) / 157.769)
	=	0.424923	/	0.46435
	=	0.9151

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
	=	17.742	/	18.649
	=	0.9514

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))
	=	(12.856 / (12.856 + 64.617))	/	(3.036 / (3.036 + 58.49))
	=	0.165942	/	0.049345
	=	3.3629

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)
	=	(33.236 / 17.742)	/	(36.288 / 18.649)
	=	1.873295	/	1.945842
	=	0.9627

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)
	=	((62.238 + 14.123) / 149.446)	/	((66.147 + 14.672) / 157.769)
	=	0.51096	/	0.512262
	=	0.9975

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
	=	(7.693 - 40.755	-	16.473)	/	149.446
	=	-0.331458

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.

Embark Early Education has a M-score of -4.13 suggests that the company is unlikely to be a manipulator.

Embark Early Education Beneish M-Score Related Terms

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Embark Early Education (ASX:EVO) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » Embark Early Education Ltd (ASX:EVO) » Definitions » Beneish M-Score

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Traded in Other Exchanges

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Address

120-122 Siganto Drive, Suite 102, Level 1, M1 Connect Business Hub, Helensvale, Gold Coast, QLD, AUS, 4212

Website

https://www.embarkeducation.com.au

Embark Early Education Ltd is a company that is engaged in the provision and management of an early childhood education service that gives parents and caregivers the option of which service suits their child's learning and care needs. The Group reports operating segments by geographical location, namely New Zealand and Australia. The majority of revenue is from the New Zealand segment. The principal activities of the Company include the management of high-quality early childhood education centres.