System1 Group (LSE:SYS1) Beneish M-Score : -0.98 (As of Jun. 08, 2024)

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What is System1 Group 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 -0.98 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for System1 Group's Beneish M-Score or its related term are showing as below:

LSE:SYS1' s Beneish M-Score Range Over the Past 10 Years
Min: -3.69 Med: -2.89 Max: -0.98
Current: -0.98

During the past 13 years, the highest Beneish M-Score of System1 Group was -0.98. The lowest was -3.69. And the median was -2.89.

System1 Group Beneish M-Score Historical Data

The historical data trend for System1 Group'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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System1 Group Beneish M-Score Chart

System1 Group Annual Data

Trend

Dec13

Dec14

Dec15

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Beneish M-Score

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-1.70

-3.69

-3.12

-3.41

-0.98

System1 Group Semi-Annual Data
	Jun13	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Beneish M-Score	Get a 7-Day Free Trial															-	-3.41	-	-0.98	-

Competitive Comparison of System1 Group's Beneish M-Score

For the Advertising Agencies subindustry, System1 Group'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.

System1 Group's Beneish M-Score Distribution in the Media - Diversified Industry

For the Media - Diversified industry and Communication Services sector, System1 Group's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where System1 Group's Beneish M-Score falls into.

System1 Group 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 System1 Group 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 * 1.4147

0.528 * 0.9952

0.404 * 2.9443

0.892 * 0.9715

0.115 * 0.6284

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0198

4.679 * 0.068887

0.327 * 0.755

-0.98

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Total Receivables was £6.45 Mil.
Revenue was £23.41 Mil.
Gross Profit was £19.72 Mil.
Total Current Assets was £12.22 Mil.
Total Assets was £14.98 Mil.
Property, Plant and Equipment(Net PPE) was £1.16 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.18 Mil.
Selling, General, & Admin. Expense(SGA) was £19.20 Mil.
Total Current Liabilities was £5.66 Mil.
Long-Term Debt & Capital Lease Obligation was £0.36 Mil.
Net Income was £0.40 Mil.
Gross Profit was £0.00 Mil.
Cash Flow from Operations was £-0.63 Mil.

Total Receivables was £4.69 Mil.
Revenue was £24.10 Mil.
Gross Profit was £20.20 Mil.
Total Current Assets was £15.86 Mil.
Total Assets was £18.59 Mil.
Property, Plant and Equipment(Net PPE) was £2.05 Mil.
Depreciation, Depletion and Amortization(DDA) was £0.95 Mil.
Selling, General, & Admin. Expense(SGA) was £19.38 Mil.
Total Current Liabilities was £8.48 Mil.
Long-Term Debt & Capital Lease Obligation was £1.42 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)
	=	(6.446 / 23.41)	/	(4.69 / 24.097)
	=	0.275352	/	0.19463
	=	1.4147

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)
	=	(20.199 / 24.097)	/	(19.718 / 23.41)
	=	0.838237	/	0.84229
	=	0.9952

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 - (12.22 + 1.162) / 14.981)	/	(1 - (15.864 + 2.054) / 18.592)
	=	0.106735	/	0.036252
	=	2.9443

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
	=	23.41	/	24.097
	=	0.9715

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))
	=	(0.954 / (0.954 + 2.054))	/	(1.184 / (1.184 + 1.162))
	=	0.317154	/	0.504689
	=	0.6284

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)
	=	(19.203 / 23.41)	/	(19.383 / 24.097)
	=	0.82029	/	0.804374
	=	1.0198

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)
	=	((0.362 + 5.659) / 14.981)	/	((1.417 + 8.48) / 18.592)
	=	0.401909	/	0.532326
	=	0.755

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
	=	(0.404 - 0	-	-0.628)	/	14.981
	=	0.068887

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.

System1 Group has a M-score of -0.98 signals that the company is likely to be a manipulator.

System1 Group Beneish M-Score Related Terms

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System1 Group (LSE:SYS1) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » System1 Group PLC (LSE:SYS1) » Definitions » Beneish M-Score

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BBA:Germany

Address

4 More London Riverside, London, GBR, SE1 2AU

Website

https://www.system1group.com

System1 Group PLC is engaged in providing marketing and market research consultancy services. The company's geographical segments include the Americas, United Kingdom, Continental Europe, and APAC. It generates maximum revenue from the Americas. The Group defines its Consultancy business as a Research and Advertising Agency.

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