Barnes Beneish M Score

B Stock  USD 45.76  0.12  0.26%   
This module uses fundamental data of Barnes to approximate the value of its Beneish M Score. Barnes M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Continue to Barnes Piotroski F Score and Barnes Altman Z Score analysis.
  
Barnes Total Debt is projected to increase significantly based on the last few years of reporting. The past year's Total Debt was at 694.22 Million. The current year Debt Current is expected to grow to about 3.4 M, whereas Issuance Repayment of Debt Securities is forecasted to decline to (62.2 M). Barnes Interest Coverage is projected to slightly decrease based on the last few years of reporting. The past year's Interest Coverage was at 8.33. The current year Long Term Debt to Equity is expected to grow to 0.42, whereas Cash Flow Per Share is forecasted to decline to 2.92.
At this time, it appears that Barnes Group is an unlikely manipulator. The earnings manipulation may begin if Barnes' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Barnes executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Barnes' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.86
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.08Focus
Asset QualityN/AFocus
Expense Coverage0.95Focus
Gross Margin Strengs0.98Focus
Accruals Factor0.95Focus
Depreciation Resistance1.02Focus
Net Sales Growth0.99Focus
Financial Leverage Condition1.07Focus

Barnes Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Barnes' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense330.3 M350.7 M
Notably Down
Up
Slightly volatile
Revenues1.1 B1.1 B
Slightly Down
Up
Pretty Stable
Trade and Non Trade Receivables323.5 M301.6 M
Notably Up
Up
Slightly volatile
Property Plant and Equipment Net390.3 M392.7 M
Slightly Down
Up
Slightly volatile
Operating Income140.1 M135 M
Sufficiently Up
Up
Pretty Stable
Net Cash Flow from Operations150.4 M151 M
Slightly Down
Up
Slightly volatile
Liabilities Non Current986.7 M963.3 M
Fairly Up
Up
Slightly volatile
Current Liabilities267.1 M279.4 M
Sufficiently Down
Up
Slightly volatile
Total Liabilities998.1 MB
Sufficiently Down
Up
Slightly volatile
Gross Margin31.8532.53
Fairly Down
Down
Very volatile
Depreciation Amortization and Accretion101.6 M104.7 M
Sufficiently Down
Up
Slightly volatile
Debt Non Current705.3 M689.9 M
Fairly Up
Up
Slightly volatile
Debt Current3.4 M3.4 M
Fairly Up
Down
Slightly volatile
Total Debt716.7 M694.2 M
Sufficiently Up
Up
Slightly volatile
Assets Non Current2.1 B2.2 B
Sufficiently Down
Up
Slightly volatile
Current Assets590.5 M612.2 M
Sufficiently Down
Up
Slightly volatile
Total Assets2.1 B2.3 B
Significantly Down
Up
Slightly volatile

Barnes Group Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Barnes' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Barnes in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Barnes' degree of accounting gimmicks and manipulations.

About Barnes Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Margin

11.05

Barnes Operating Margin is projected to increase slightly based on the last few years of reporting. The past year's Operating Margin was at 10.73

Barnes Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Barnes. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201820192020202120222023 (projected)
Revenues1.5 B1.49 B1.12 B1.26 B1.13 B1.13 B
Total Assets2.81 B2.74 B2.68 B2.58 B2.32 B2.14 B
Current Assets806.15 M764.39 M642.35 M680.21 M612.19 M590.49 M
Assets Non Current2 B1.97 B2.03 B1.9 B2.18 B2.08 B
Total Liabilities1.61 B1.47 B1.29 B1.15 B1.03 B998.06 M
Current Liabilities357.86 M342.88 M295.38 M310.39 M279.35 M267.12 M
Total Debt944.02 M834.77 M704.26 M603.67 M694.22 M716.69 M
Debt Current7.66 M9.76 M4.39 M3.73 M3.36 M3.45 M
Debt Non Current936.36 M825.02 M699.87 M599.93 M689.92 M705.33 M
Operating Income231.76 M236.45 M123.37 M150.02 M135.02 M140.05 M
Gross Margin35.5936.6835.8636.1432.5331.85

About Barnes Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Barnes Group's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Barnes using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Barnes Group based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Barnes Group Inc. provides engineered products, industrial technologies, and solutions in the United States and internationally. Barnes Group Inc. was founded in 1857 and is headquartered in Bristol, Connecticut. Barnes operates under Specialty Industrial Machinery classification in the United States and is traded on New York Stock Exchange. It employs 5100 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Barnes without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Barnes

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Barnes position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Barnes will appreciate offsetting losses from the drop in the long position's value.

Moving together with Barnes

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The ability to find closely correlated positions to Barnes could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Barnes when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Barnes - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Barnes Group to buy it.
The correlation of Barnes is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Barnes moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Barnes Group moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Barnes can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Continue to Barnes Piotroski F Score and Barnes Altman Z Score analysis. Note that the Barnes Group information on this page should be used as a complementary analysis to other Barnes' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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Is Barnes' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Barnes. If investors know Barnes will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Barnes listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.40) 
Market Capitalization
2.3 B
Quarterly Revenue Growth
(0.032) 
Return On Assets
0.0381
Return On Equity
0.0196
The market value of Barnes Group is measured differently than its book value, which is the value of Barnes that is recorded on the company's balance sheet. Investors also form their own opinion of Barnes' value that differs from its market value or its book value, called intrinsic value, which is Barnes' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Barnes' market value can be influenced by many factors that don't directly affect Barnes' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Barnes' value and its price as these two are different measures arrived at by different means. Investors typically determine Barnes value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Barnes' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.