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China Banking (PHS:CHIB) Beneish M-Score : -2.58 (As of May. 25, 2024)


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What is China Banking 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 -2.58 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

PHS:CHIB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.72   Med: -2.55   Max: -1.89
Current: -2.58

During the past 13 years, the highest Beneish M-Score of China Banking was -1.89. The lowest was -3.72. And the median was -2.55.


China Banking 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 China Banking 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 * 1+0.528 * 1+0.404 * 1.0004+0.892 * 1.0435+0.115 * 0.9186
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2263+4.679 * -0.0299-0.327 * 0.8457
=-2.58

* 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 ₱0 Mil.
Revenue was 15009.241 + 13045.55 + 15541.613 + 13822.015 = ₱57,418 Mil.
Gross Profit was 15009.241 + 13045.55 + 15541.613 + 13822.015 = ₱57,418 Mil.
Total Current Assets was ₱0 Mil.
Total Assets was ₱1,506,134 Mil.
Property, Plant and Equipment(Net PPE) was ₱10,006 Mil.
Depreciation, Depletion and Amortization(DDA) was ₱2,054 Mil.
Selling, General, & Admin. Expense(SGA) was ₱2,189 Mil.
Total Current Liabilities was ₱0 Mil.
Long-Term Debt & Capital Lease Obligation was ₱89,551 Mil.
Net Income was 5902.269 + 5832.472 + 5352.934 + 5811.504 = ₱22,899 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = ₱0 Mil.
Cash Flow from Operations was 16642.848 + 26111.627 + 9050.983 + 16126.392 = ₱67,932 Mil.
Total Receivables was ₱0 Mil.
Revenue was 13150.791 + 11943.989 + 17318.724 + 12613.772 = ₱55,027 Mil.
Gross Profit was 13150.791 + 11943.989 + 17318.724 + 12613.772 = ₱55,027 Mil.
Total Current Assets was ₱0 Mil.
Total Assets was ₱1,351,923 Mil.
Property, Plant and Equipment(Net PPE) was ₱9,458 Mil.
Depreciation, Depletion and Amortization(DDA) was ₱1,754 Mil.
Selling, General, & Admin. Expense(SGA) was ₱1,711 Mil.
Total Current Liabilities was ₱0 Mil.
Long-Term Debt & Capital Lease Obligation was ₱95,049 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)
=(0 / 57418.419) / (0 / 55027.276)
=0 / 0
=1

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)
=(55027.276 / 55027.276) / (57418.419 / 57418.419)
=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 + 10005.817) / 1506134.051) / (1 - (0 + 9457.705) / 1351923.124)
=0.993357 / 0.993004
=1.0004

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
=57418.419 / 55027.276
=1.0435

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))
=(1754.268 / (1754.268 + 9457.705)) / (2054.235 / (2054.235 + 10005.817))
=0.156464 / 0.170334
=0.9186

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)
=(2189.233 / 57418.419) / (1710.984 / 55027.276)
=0.038128 / 0.031093
=1.2263

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)
=((89550.686 + 0) / 1506134.051) / ((95048.827 + 0) / 1351923.124)
=0.059457 / 0.070306
=0.8457

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
=(22899.179 - 0 - 67931.85) / 1506134.051
=-0.0299

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.

China Banking has a M-score of -2.58 suggests that the company is unlikely to be a manipulator.


China Banking Beneish M-Score Related Terms

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China Banking (PHS:CHIB) Business Description

Traded in Other Exchanges
N/A
Address
8745 Paseo de Roxas corner Villar Street, 15th Floor, China Bank Building, Makati City, PHL, 1226
China Banking Corp is a commercial bank engaged in corporate and SME lending, retail loans including mortgage and auto loans, treasury and foreign exchange trading, trust and investment management, wealth management, cash management, and insurance products. The group has five business segments namely, Institutional Banking, Consumer Banking, Retail Banking Business, Financial Markets, and Others which include credit management, thrift banking business, operations and financial control, and other support services. The majority of the company's revenue comes from the Retail Banking Business.