New Oriental Beneish M Score

EDU -  USA Stock  

USD 1.99  0.09  4.74%

This module uses fundamental data of New Oriental to approximate the value of its Beneish M Score. New Oriental 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 Investing Opportunities.

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Issuance Repayment of Debt Securities is likely to gain to about 18.5 M in 2021, whereas Total Debt is likely to drop slightly above 1.4 B in 2021. New Oriental Return on Sales is comparatively stable at the moment as compared to the past year. New Oriental reported Return on Sales of 0.14 in 2020. Sales per Share is likely to gain to 2.81 in 2021, whereas Dividends per Basic Common Share is likely to drop 0.049 in 2021.
At this time, it appears that New Oriental Education is an unlikely manipulator. The earnings manipulation may begin if New Oriental'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 New Oriental 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 New Oriental'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.
-2.61
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables
1.0
Asset Quality
1.0
Expense Coverage
1.0
Gross Margin Strengs
1.02
Accruals Factor
1.0
Depreciation Resistance
1.0
Net Sales Growth
1.08
Financial Leverage Condition
0.92

New Oriental 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 New Oriental'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.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues4.4 B4.1 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative ExpenseB1.8 B
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations777.7 M925.1 M
Fairly Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion187.2 M173.5 M
Significantly Up
Increasing
Slightly volatile
Total Assets8.1 B7.5 B
Significantly Up
Increasing
Slightly volatile
Investments3.4 B3.2 B
Significantly Up
Increasing
Slightly volatile
Investments Current2.9 B2.7 B
Significantly Up
Increasing
Slightly volatile
Investments Non Current540.3 M500.8 M
Significantly Up
Increasing
Slightly volatile
Property Plant and Equipment Net2.6 B2.4 B
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables37.6 M34.8 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities4.6 B4.2 B
Significantly Up
Increasing
Slightly volatile
Current Assets4.7 B4.3 B
Significantly Up
Increasing
Slightly volatile
Assets Non Current3.5 B3.2 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities3.1 B2.9 B
Significantly Up
Increasing
Slightly volatile
Liabilities Non Current1.5 B1.4 B
Significantly Up
Increasing
Slightly volatile
Total Debt1.4 B1.8 B
Significantly Down
Increasing
Slightly volatile
Debt Current343.8 M345.8 M
Slightly Down
Decreasing
Slightly volatile
Debt Non Current1.1 B1.4 B
Significantly Down
Increasing
Slightly volatile
Operating Income363.5 M458.9 M
Significantly Down
Increasing
Slightly volatile
Gross Margin0.510.5
Fairly Up
Decreasing
Slightly volatile

New Oriental Education 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 New Oriental's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards New Oriental in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find New Oriental's degree of accounting gimmicks and manipulations.

About New Oriental 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 Expenses

1.97 BillionShare
New Oriental Operating Expenses is comparatively stable at the moment as compared to the past year. New Oriental reported Operating Expenses of 1.83 Billion in 2020

New Oriental 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 New Oriental. 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.
201620172018201920202021 (projected)
Revenues1.8 B2.45 B3.1 B3.58 B4.12 B4.44 B
Total Assets2.92 B3.98 B4.65 B6.56 B7.54 B8.14 B
Current Assets2.33 B2.94 B3.47 B3.76 B4.32 B4.66 B
Assets Non Current598.72 M1.04 B1.18 B2.8 B3.22 B3.47 B
Total Liabilities1.2 B1.76 B2.12 B3.69 B4.24 B4.57 B
Current Liabilities1.2 B1.75 B2.01 B2.48 B2.85 B3.08 B
Operating Income262.15 M262.96 M301.91 M399 M458.85 M363.49 M
Investments1.55 B2.06 B2.08 B2.75 B3.17 B3.42 B
Investments Current1.33 B1.62 B1.67 B2.32 B2.67 B2.88 B

About New Oriental Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze New Oriental Education's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of New Oriental using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of New Oriental Education 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.
New Oriental Education Technology Group Inc. provides private educational services under the New Oriental brand in the Peoples Republic of China. The company was founded in 1993 and is headquartered in Beijing, the Peoples Republic of China. New Oriental operates under Education Training Services classification in the United States and is traded on New York Stock Exchange. It employs 69438 people.

New Oriental Investors Sentiment

The influence of New Oriental's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in New Oriental. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Current Sentiment - EDU

New Oriental Education Investor Sentiment

Greater number of Macroaxis users are currently bullish on New Oriental Education. What is your trading attitude regarding investing in New Oriental Education? Are you bullish or bearish?
Bullish
Bearish
98% Bullish
2% Bearish
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Pair Trading with New Oriental

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 New Oriental 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 New Oriental will appreciate offsetting losses from the drop in the long position's value.

New Oriental Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for New Oriental and Elite Education Group. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
Run Pair Correlation  
Continue to Investing Opportunities. Note that the New Oriental Education information on this page should be used as a complementary analysis to other New Oriental's 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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When running New Oriental Education price analysis, check to measure New Oriental's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy New Oriental is operating at the current time. Most of New Oriental's value examination focuses on studying past and present price action to predict the probability of New Oriental's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move New Oriental's price. Additionally, you may evaluate how the addition of New Oriental to your portfolios can decrease your overall portfolio volatility.
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The market value of New Oriental Education is measured differently than its book value, which is the value of New Oriental that is recorded on the company's balance sheet. Investors also form their own opinion of New Oriental's value that differs from its market value or its book value, called intrinsic value, which is New Oriental's 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 New Oriental's market value can be influenced by many factors that don't directly affect New Oriental Education underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between New Oriental's value and its price as these two are different measures arrived at by different means. Investors typically determine New Oriental value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, New Oriental's 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.