Formula Beneish M Score

Stocks . USA . 
Stock . Formula Systems 1985
FORTY Stock  USD 68.45  1.34  1.92%   
This module uses fundamental data of Formula Systems to approximate the value of its Beneish M Score. Formula Systems 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 Formula Systems Piotroski F Score and Formula Systems Altman Z Score analysis.
  
Total Debt is likely to drop to about 633.7 M in 2023. Debt Current is likely to drop to about 216.4 M in 2023. Formula Systems Asset Turnover is fairly stable at the moment as compared to the past year. Formula Systems reported Asset Turnover of 0.94 in 2022. Current Ratio is likely to rise to 1.40 in 2023, whereas Book Value per Share is likely to drop 34.41 in 2023.
At this time, it appears that Formula Systems 1985 is an unlikely manipulator. The earnings manipulation may begin if Formula Systems' 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 Formula Systems 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 Formula Systems' 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.
-2.33
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.03Focus
Asset Quality0.99Focus
Expense Coverage1.01Focus
Gross Margin Strengs1.07Focus
Accruals Factor1.01Focus
Depreciation Resistance1.19Focus
Net Sales Growth0.85Focus
Financial Leverage Condition0.95Focus

Formula Systems 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 Formula Systems' 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 Expense272 M318 M
Fairly Down
Slightly volatile
Revenues2.2 B2.6 B
Fairly Down
Slightly volatile
Trade and Non Trade Receivables613.4 M702.7 M
Fairly Down
Slightly volatile
Property Plant and Equipment Net185.4 M171.8 M
Significantly Up
Slightly volatile
Operating Income298.5 M276.6 M
Significantly Up
Slightly volatile
Net Cash Flow from Operations200.4 M239.1 M
Fairly Down
Slightly volatile
Liabilities Non Current540.2 M616 M
Fairly Down
Slightly volatile
Current Liabilities826.8 M1 B
Significantly Down
Slightly volatile
Total Liabilities1.4 B1.6 B
Fairly Down
Slightly volatile
Investments Non Current50.2 M59.7 M
Fairly Down
Pretty Stable
Investments Current28.8 M24.7 M
Fairly Up
Slightly volatile
Investments74.7 M84.4 M
Fairly Down
Pretty Stable
Gross Margin0.260.242
Notably Up
Pretty Stable
Depreciation Amortization and Accretion94.1 M115.3 M
Significantly Down
Slightly volatile
Debt Non Current417.3 M500.5 M
Fairly Down
Slightly volatile
Debt Current216.4 M271.7 M
Significantly Down
Slightly volatile
Total Debt633.7 M772.1 M
Significantly Down
Slightly volatile
Assets Non Current1.3 B1.4 B
Moderately Down
Slightly volatile
Current Assets1.2 B1.4 B
Fairly Down
Slightly volatile
Total Assets2.5 B2.8 B
Fairly Down
Slightly volatile

Formula Systems 1985 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 Formula Systems' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Formula Systems in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Formula Systems' degree of accounting gimmicks and manipulations.
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About Formula Systems 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.

Depreciation Amortization and Accretion

94.09 Million

Formula Systems Depreciation Amortization and Accretion is fairly stable at the moment as compared to the past year. Formula Systems reported Depreciation Amortization and Accretion of 115.31 Million in 2022

Formula Systems 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 Formula Systems. 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)
Revenues1.49 B1.7 B1.93 B2.4 B2.57 B2.18 B
Total Assets1.66 B2.09 B2.52 B2.75 B2.79 B2.46 B
Current Assets781.1 M965.5 M1.16 B1.3 B1.37 B1.18 B
Assets Non Current883.45 M1.12 B1.36 B1.45 B1.42 B1.28 B
Total Liabilities859.15 M1.19 B1.41 B1.57 B1.62 B1.37 B
Current Liabilities525.53 M671.39 M779.9 M947.6 M1 B826.81 M
Total Debt381.43 M603.49 M668.54 M712.91 M772.14 M633.73 M
Debt Current127 M192.33 M193.96 M265.81 M271.67 M216.39 M
Debt Non Current254.43 M411.16 M474.57 M447.1 M500.47 M417.33 M
Operating Income109.62 M138.49 M170.64 M208.02 M276.64 M298.48 M
Investments52.5 M62.51 M59.84 M79.64 M84.44 M74.7 M
Investments Current26.79 M36.49 M31.53 M27.07 M24.71 M28.85 M

About Formula Systems Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Formula Systems 1985's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Formula Systems using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Formula Systems 1985 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.
Formula Systems Ltd., through its subsidiaries, provides proprietary and non-proprietary software solutions, IT professional services, software product marketing and support, and computer infrastructure and integration solutions worldwide. Formula Systems Ltd. was incorporated in 1985 and is headquartered in Or Yehuda, Israel. Formula Sys operates under Information Technology Services classification in the United States and is traded on NASDAQ Exchange. It employs 20333 people.

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Check out Formula Systems Piotroski F Score and Formula Systems Altman Z Score analysis. You can also try Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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When running Formula Systems' price analysis, check to measure Formula Systems' 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 Formula Systems is operating at the current time. Most of Formula Systems' value examination focuses on studying past and present price action to predict the probability of Formula Systems' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Formula Systems' price. Additionally, you may evaluate how the addition of Formula Systems to your portfolios can decrease your overall portfolio volatility.
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Is Formula Systems' 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 Formula Systems. If investors know Formula 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 Formula Systems 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
(0.023) 
Earnings Share
5.18
Revenue Per Share
168.172
Quarterly Revenue Growth
(0.036) 
Return On Assets
0.0524
The market value of Formula Systems 1985 is measured differently than its book value, which is the value of Formula that is recorded on the company's balance sheet. Investors also form their own opinion of Formula Systems' value that differs from its market value or its book value, called intrinsic value, which is Formula Systems' 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 Formula Systems' market value can be influenced by many factors that don't directly affect Formula Systems' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
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Please note, there is a significant difference between Formula Systems' value and its price as these two are different measures arrived at by different means. Investors typically determine if Formula Systems is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Formula Systems' 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. Check out Formula Systems Piotroski F Score and Formula Systems Altman Z Score analysis.


 
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