Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Beneish M-Score : -1.74 (As of May. 18, 2024)

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What is Ali Alghanim Sons Automotive Co KSC 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 -1.74 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for Ali Alghanim Sons Automotive Co KSC's Beneish M-Score or its related term are showing as below:

KUW:ALG' s Beneish M-Score Range Over the Past 10 Years
Min: -2.06 Med: -1.72 Max: -0.23
Current: -1.74

During the past 3 years, the highest Beneish M-Score of Ali Alghanim Sons Automotive Co KSC was -0.23. The lowest was -2.06. And the median was -1.72.

Ali Alghanim Sons Automotive Co KSC Beneish M-Score Historical Data

The historical data trend for Ali Alghanim Sons Automotive Co KSC'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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Ali Alghanim Sons Automotive Co KSC Beneish M-Score Chart

Ali Alghanim Sons Automotive Co KSC Annual Data

Trend

Dec21

Dec22

Dec23

Beneish M-Score

-1.70

Ali Alghanim Sons Automotive Co KSC Quarterly Data
	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial							-	-0.23	-2.06	-1.70	-1.74

Competitive Comparison of Ali Alghanim Sons Automotive Co KSC's Beneish M-Score

For the Auto & Truck Dealerships subindustry, Ali Alghanim Sons Automotive Co KSC'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.

Ali Alghanim Sons Automotive Co KSC's Beneish M-Score Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Ali Alghanim Sons Automotive Co KSC's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Ali Alghanim Sons Automotive Co KSC's Beneish M-Score falls into.

Ali Alghanim Sons Automotive Co KSC 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 Ali Alghanim Sons Automotive Co KSC 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 * 0.8664

0.528 * 0.9613

0.404 * 2.6427

0.892 * 1.2504

0.115 * 0.9609

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0074

4.679 * 0.006386

0.327 * 1.0872

-1.74

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was KWD17.2 Mil.
Revenue was 64.227 + 67.252 + 69.031 + 63.809 = KWD264.3 Mil.
Gross Profit was 15.499 + 16.211 + 17.192 + 15.569 = KWD64.5 Mil.
Total Current Assets was KWD110.9 Mil.
Total Assets was KWD234.4 Mil.
Property, Plant and Equipment(Net PPE) was KWD110.6 Mil.
Depreciation, Depletion and Amortization(DDA) was KWD7.8 Mil.
Selling, General, & Admin. Expense(SGA) was KWD32.3 Mil.
Total Current Liabilities was KWD102.2 Mil.
Long-Term Debt & Capital Lease Obligation was KWD33.3 Mil.
Net Income was 6.317 + 7.553 + 7.513 + 7.425 = KWD28.8 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = KWD0.0 Mil.
Cash Flow from Operations was 9.703 + 12.579 + 3.297 + 1.732 = KWD27.3 Mil.

Total Receivables was KWD15.8 Mil.
Revenue was 63.112 + 50.23 + 49.578 + 48.466 = KWD211.4 Mil.
Gross Profit was 15.235 + 11.85 + 11.321 + 11.161 = KWD49.6 Mil.
Total Current Assets was KWD88.4 Mil.
Total Assets was KWD194.8 Mil.
Property, Plant and Equipment(Net PPE) was KWD102.4 Mil.
Depreciation, Depletion and Amortization(DDA) was KWD6.9 Mil.
Selling, General, & Admin. Expense(SGA) was KWD25.7 Mil.
Total Current Liabilities was KWD83.9 Mil.
Long-Term Debt & Capital Lease Obligation was KWD19.7 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)
	=	(17.154 / 264.319)	/	(15.834 / 211.386)
	=	0.064899	/	0.074906
	=	0.8664

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)
	=	(49.567 / 211.386)	/	(64.471 / 264.319)
	=	0.234486	/	0.243914
	=	0.9613

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 - (110.93 + 110.639) / 234.416)	/	(1 - (88.412 + 102.36) / 194.812)
	=	0.054804	/	0.020738
	=	2.6427

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
	=	264.319	/	211.386
	=	1.2504

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))
	=	(6.904 / (6.904 + 102.36))	/	(7.787 / (7.787 + 110.639))
	=	0.063186	/	0.065754
	=	0.9609

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)
	=	(32.331 / 264.319)	/	(25.666 / 211.386)
	=	0.122318	/	0.121418
	=	1.0074

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)
	=	((33.324 + 102.197) / 234.416)	/	((19.688 + 83.906) / 194.812)
	=	0.578122	/	0.531764
	=	1.0872

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
	=	(28.808 - 0	-	27.311)	/	234.416
	=	0.006386

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.

Ali Alghanim Sons Automotive Co KSC has a M-score of -1.74 signals that the company is likely to be a manipulator.

Ali Alghanim Sons Automotive Co KSC Beneish M-Score Related Terms

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Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Ali Alghanim Sons Automotive Co KSC (KUW:ALG) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Airport Road 55, P.O. Box 21540, Safat, Opposite Kaifan Telecommunication, Shuwaikh, KWT, 13076

Website

https://alg.com.kw

Ali Alghanim Sons Automotive Co KSC is engaged in the automotive business. The Primary Activities of the Company are selling and purchasing cars and spare parts, importing and exporting light and heavy vehicles and cars, renting cars, maintaining light & heavy vehicles and cars, trading auto spare parts, and renting equipment and their maintenance. The Group is divided into four main geographical segments which are the State of Kuwait, Iraq, Egypt and the United Arab Emirates. The majority is derived from Kuwait.