| DRX Stock | | | CAD 16.75 0.57 3.29% |
This module uses fundamental data of ADF to approximate the value of its Beneish M Score. ADF 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. Check out
Investing Opportunities to better understand how to build diversified portfolios, which includes a position in ADF Group. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as
signals in board of governors.
At this time, ADF's
Debt Ratio is very stable compared to the past year. As of the 4th of June 2024,
Cash Flow To Debt Ratio is likely to grow to 1.71, while
Short and Long Term Debt Total is likely to drop about 27.6
M. At this time, ADF's
Stock Based Compensation To Revenue is very stable compared to the past year. As of the 4th of June 2024,
PB Ratio is likely to grow to 1.69, while
Dividend Yield is likely to drop 0.
At this time, ADF's M Score is inapplicable. The earnings manipulation may begin if ADF's 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 ADF 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 ADF's 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.
5.69
Beneish M Score - Inapplicable
| Elasticity of Receivables | |
| Financial Leverage Condition | |
ADF 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 ADF's 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.
ADF 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 ADF's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards ADF in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find ADF's degree of accounting gimmicks and manipulations.
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About ADF 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.
ADF 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 ADF. 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.
About ADF Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze ADF Group's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of ADF using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at
the intrinsic value of ADF 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.
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ADF financial ratios help investors to determine whether ADF Stock is cheap or expensive when compared to a particular measure, such as profits or
enterprise value. In other words, they help investors to determine the cost of investment in ADF with respect to the benefits of owning ADF security.