NEXOF (NEXON Co) Beneish M-Score : -1.76 (As of Oct. 09, 2024)

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What is NEXON Co Beneish M-Score?

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.

Warning Sign:

Beneish M-Score -1.76 higher than -1.78, which implies that the company might have manipulated its financial results.

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

NEXOF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.21 Med: -2.52 Max: -1.76
Current: -1.76

During the past 13 years, the highest Beneish M-Score of NEXON Co was -1.76. The lowest was -3.21. And the median was -2.52.

NEXON Co Beneish M-Score Historical Data

The historical data trend for NEXON Co's Beneish M-Score can be seen below:

* 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.

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NEXON Co Beneish M-Score Chart

NEXON Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.35

-2.96

-2.42

-2.13

-2.52

NEXON Co Quarterly Data
	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
Beneish M-Score	Get a 7-Day Free Trial															-2.14	-2.17	-2.52	-2.74	-1.76

Competitive Comparison of NEXON Co's Beneish M-Score

For the Electronic Gaming & Multimedia subindustry, NEXON Co's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

NEXON Co's Beneish M-Score Distribution in the Interactive Media Industry

For the Interactive Media industry and Communication Services sector, NEXON Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where NEXON Co's Beneish M-Score falls into.

NEXON Co 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 NEXON Co for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.8403

0.528 * 1.0627

0.404 * 0.9119

0.892 * 1.0079

0.115 * 1.0869

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9454

4.679 * -0.033822

0.327 * 1.2023

-1.91

This Year (Jun24) TTM:

Last Year (Jun23) TTM:

Total Receivables was $528 Mil.
Revenue was 775.839 + 723.662 + 587.416 + 813.392 = $2,900 Mil.
Gross Profit was 495.927 + 452.954 + 344.378 + 570.516 = $1,864 Mil.
Total Current Assets was $4,818 Mil.
Total Assets was $7,929 Mil.
Property, Plant and Equipment(Net PPE) was $426 Mil.
Depreciation, Depletion and Amortization(DDA) was $61 Mil.
Selling, General, & Admin. Expense(SGA) was $977 Mil.
Total Current Liabilities was $633 Mil.
Long-Term Debt & Capital Lease Obligation was $218 Mil.
Net Income was 252.616 + 239.743 + -290.919 + 237.864 = $439 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 140.162 + 81.318 + 207.999 + 278.007 = $707 Mil.

Total Receivables was $285 Mil.
Revenue was 668.062 + 928.348 + 601.083 + 680.207 = $2,878 Mil.
Gross Profit was 435.999 + 672.236 + 373.11 + 483.877 = $1,965 Mil.
Total Current Assets was $4,774 Mil.
Total Assets was $8,149 Mil.
Property, Plant and Equipment(Net PPE) was $348 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General, & Admin. Expense(SGA) was $1,025 Mil.
Total Current Liabilities was $573 Mil.
Long-Term Debt & Capital Lease Obligation was $155 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)
	=	(527.911 / 2900.309)	/	(284.618 / 2877.7)
	=	0.182019	/	0.098905
	=	1.8403

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)
	=	(1965.222 / 2877.7)	/	(1863.775 / 2900.309)
	=	0.682914	/	0.642613
	=	1.0627

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 - (4817.864 + 425.656) / 7929.171)	/	(1 - (4773.543 + 348.243) / 8148.525)
	=	0.338705	/	0.371446
	=	0.9119

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
	=	2900.309	/	2877.7
	=	1.0079

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))
	=	(55.183 / (55.183 + 348.243))	/	(61.278 / (61.278 + 425.656))
	=	0.136786	/	0.125845
	=	1.0869

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)
	=	(976.569 / 2900.309)	/	(1024.924 / 2877.7)
	=	0.336712	/	0.356161
	=	0.9454

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)
	=	((217.902 + 633.492) / 7929.171)	/	((154.933 + 572.786) / 8148.525)
	=	0.107375	/	0.089307
	=	1.2023

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
	=	(439.304 - 0	-	707.486)	/	7929.171
	=	-0.033822

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.

NEXON Co has a M-score of -1.91 suggests that the company is unlikely to be a manipulator.

NEXON Co Beneish M-Score Related Terms

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NEXON Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » NEXON Co Ltd (OTCPK:NEXOF) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

NEXOY:USA 3659:Japan 7NX:Germany

Address

1-4-5 Roppongi, Minato-ku, Tokyo, JPN, 106-0032

Website

http://www.nexon.co.jp

NEXON Co Ltd provides engaging, high quality, geographically unique games to international users through the development and service of PC online and mobile games. The company's major PC online titles include MapleStory and Dungeon&Fighter and their mobile games include HIT and DomiNations. The games are in approximately 200 countries including China, Korea, Japan, North America, and Europe. The PC segment is responsible for a majority of revenue, while the Mobile segment accounts for a smaller portion. Geographically, over half of the company's revenue is derived from China, roughly one quarter is derived from Korea, and the remainder is derived from Japan, North America, and Europe & Others.