Envela Beneish M Score

ELA -  USA Stock  

USD 4.95  0.11  2.27%

This module uses fundamental data of Envela Corp to approximate the value of its Beneish M Score. Envela Corp 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 Envela Corp Piotroski F Score and Envela Corp Altman Z Score analysis.
  
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The current year Total Debt is expected to grow to about 28.3 M. The current year Debt Current is expected to grow to about 4.7 M. Envela Corp Asset Turnover is projected to slightly decrease based on the last few years of reporting. The past year's Asset Turnover was at 2.86. The current year Debt to Equity Ratio is expected to grow to 1.17, whereas Book Value per Share is forecasted to decline to 0.82.
At this time, it appears that Envela Corp is a possible manipulator. The earnings manipulation may begin if Envela Corp'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 Envela Corp 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 Envela Corp'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.
-1.24
Beneish M Score - Possible Manipulator
Elasticity of Receivables1.36Focus
Asset Quality2.26Focus
Expense Coverage1.02Focus
Gross Margin Strengs1.0Focus
Accruals Factor1.02Focus
Depreciation Resistance1.27Focus
Net Sales Growth0.79Focus
Financial Leverage Condition1.0Focus

Envela Corp 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 Envela Corp'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
Revenues112 M141 M
Significantly Down
Decreasing
Stable
Selling General and Administrative Expense16.8 M20.8 M
Significantly Down
Increasing
Very volatile
Net Cash Flow from Operations2.4 M2.8 M
Fairly Down
Decreasing
Stable
Depreciation Amortization and Accretion774.7 K926.1 K
Fairly Down
Increasing
Slightly volatile
Total Assets63.9 M59.3 M
Significantly Up
Increasing
Slightly volatile
Investments2.1 M2.4 M
Fairly Down
Increasing
Slightly volatile
Investments Current30.3 K30.5 K
Slightly Down
Decreasing
Slightly volatile
Investments Non Current2.1 M2.4 M
Fairly Down
Increasing
Slightly volatile
Property Plant and Equipment Net16.7 M15.5 M
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables7.7 M7.2 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities34.1 M31.6 M
Significantly Up
Increasing
Slightly volatile
Current Assets28.1 M34.4 M
Significantly Down
Increasing
Slightly volatile
Assets Non Current26.9 M24.9 M
Significantly Up
Increasing
Slightly volatile
Current Liabilities8.4 M9.8 M
Fairly Down
Decreasing
Slightly volatile
Liabilities Non Current23.6 M21.8 M
Significantly Up
Increasing
Slightly volatile
Total Debt28.3 M26.2 M
Significantly Up
Increasing
Slightly volatile
Debt Current4.7 M4.3 M
Significantly Up
Increasing
Slightly volatile
Debt Non Current23.6 M21.8 M
Significantly Up
Increasing
Slightly volatile
Operating Income10.2 M9.5 M
Significantly Up
Increasing
Slightly volatile
Gross Margin0.220.221
Slightly Down
Increasing
Slightly volatile

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

About Envela Corp 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

17.55 Million

Share
Envela Corp Operating Expenses is projected to increase significantly based on the last few years of reporting. The past year's Operating Expenses was at 21.72 Million

Envela Corp 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 Envela Corp. 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.
201720182019202020212022 (projected)
Revenues61.99 M54.06 M82.02 M113.92 M140.97 M111.98 M
Total Assets13.31 M13.02 M27 M40.58 M59.27 M63.95 M
Current Assets10.89 M11.39 M18.35 M23.51 M34.37 M28.08 M
Assets Non Current2.42 M1.62 M8.65 M17.07 M24.9 M26.87 M
Total Liabilities5.56 M4.6 M15.81 M23 M31.64 M34.14 M
Current Liabilities5.56 M4.6 M4.81 M6.05 M9.8 M8.39 M
Total Debt13.66 K2.35 K13.26 M20.22 M26.18 M28.25 M
Debt Current12.59 K2.35 K2.26 M3.27 M4.34 M4.68 M
Debt Non Current2.32 M1.07 K11 M16.95 M21.84 M23.57 M
Operating Income1.95 M651.43 K3.24 M6.79 M9.5 M10.25 M

About Envela Corp Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Envela Corp's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Envela Corp using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Envela Corp 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.
Envela Corporation, together with its subsidiaries, primarily buys and sells jewelry and bullion products to individual consumers, dealers, Fortune 500 companies, municipalities, school districts, and other organizations in the United States. Envela Corporation was incorporated in 1965 and is headquartered in Irving, Texas. Envela Corp operates under Luxury Goods classification in the United States and is traded on NYSEMKT Exchange. It employs 256 people.

Envela Corp Investors Sentiment

The influence of Envela Corp'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 Envela. 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.

Envela Corp Implied Volatility

    
  27.59  
Envela Corp's implied volatility exposes the market's sentiment of Envela Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Envela Corp's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Envela Corp stock will not fluctuate a lot when Envela Corp's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Envela Corp in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Envela Corp's short interest history, or implied volatility extrapolated from Envela Corp options trading.

Current Sentiment - ELA

Envela Corp Investor Sentiment

Macroaxis portfolio users are insensible in their opinion about investing in Envela Corp. What is your opinion about investing in Envela Corp? Are you bullish or bearish?
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Pair Trading with Envela Corp

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 Envela Corp 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 Envela Corp will appreciate offsetting losses from the drop in the long position's value.

Envela Corp Pair Correlation

Correlation Analysis For Direct Indexing and Tax-loss Harvesting

The ability to find closely correlated positions to Envela Corp could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Envela Corp 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 Envela Corp - 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 Envela Corp to buy it.
The correlation of Envela Corp 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 Envela Corp moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Envela Corp 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 Envela Corp 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 Envela Corp Piotroski F Score and Envela Corp Altman Z Score analysis. Note that the Envela Corp information on this page should be used as a complementary analysis to other Envela Corp'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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Is Envela Corp's 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 Envela Corp. If investors know Envela 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 Envela Corp listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Envela Corp is measured differently than its book value, which is the value of Envela that is recorded on the company's balance sheet. Investors also form their own opinion of Envela Corp's value that differs from its market value or its book value, called intrinsic value, which is Envela Corp'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 Envela Corp's market value can be influenced by many factors that don't directly affect Envela Corp's 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 Envela Corp's value and its price as these two are different measures arrived at by different means. Investors typically determine Envela Corp value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Envela Corp'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.