Genpact Beneish M Score

G
 Stock
  

USD 43.17  0.93  2.20%   

This module uses fundamental data of Genpact to approximate the value of its Beneish M Score. Genpact 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. Please check Genpact Piotroski F Score and Genpact Altman Z Score analysis.
  
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The current year Issuance Repayment of Debt Securities is expected to grow to about 50.3 M, whereas Total Debt is forecasted to decline to about 1.7 B. Genpact Current Ratio is projected to slightly decrease based on the last few years of reporting. The past year's Current Ratio was at 1.47. The current year Dividend Yield is expected to grow to 0.008211, whereas Debt to Equity Ratio is forecasted to decline to 1.61.
At this time, it appears that Genpact is an unlikely manipulator. The earnings manipulation may begin if Genpact'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 Genpact 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 Genpact'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.
-2.64
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.04Focus
Asset Quality1.0Focus
Expense Coverage1.04Focus
Gross Margin Strengs0.98Focus
Accruals Factor1.04Focus
Depreciation Resistance0.99Focus
Net Sales Growth0.92Focus
Financial Leverage Condition0.95Focus

Genpact 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 Genpact'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
Revenues3.7 BB
Significantly Down
Increasing
Slightly volatile
Selling General and Administrative Expense823 M865.7 M
Notably Down
Increasing
Slightly volatile
Net Cash Flow from Operations588.5 M694.3 M
Fairly Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion147.8 M167.6 M
Fairly Down
Increasing
Slightly volatile
Total Assets4.6 BB
Significantly Down
Increasing
Slightly volatile
Investments772.2 K752.4 K
Fairly Up
Decreasing
Stable
Investments Current16.4 M16.5 M
Slightly Down
Decreasing
Slightly volatile
Investments Non Current986.7 K961.4 K
Fairly Up
Increasing
Very volatile
Property Plant and Equipment Net420.1 M485.7 M
Fairly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables848.3 M887.7 M
Sufficiently Down
Increasing
Slightly volatile
Total Liabilities2.7 B3.1 B
Fairly Down
Increasing
Slightly volatile
Current Assets1.8 B1.9 B
Notably Down
Increasing
Slightly volatile
Assets Non Current2.8 B3.1 B
Significantly Down
Increasing
Slightly volatile
Current Liabilities1.2 B1.3 B
Fairly Down
Increasing
Slightly volatile
Liabilities Non Current1.6 B1.8 B
Moderately Down
Increasing
Slightly volatile
Total Debt1.7 BB
Fairly Down
Increasing
Slightly volatile
Debt Current353.1 M445 M
Significantly Down
Increasing
Slightly volatile
Debt Non Current1.3 B1.5 B
Fairly Down
Increasing
Slightly volatile
Operating Income468.7 M509 M
Significantly Down
Increasing
Slightly volatile
Gross Margin0.350.356
Fairly Down
Decreasing
Slightly volatile

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

About Genpact 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.

EBITDA Margin

0.17

Share
Genpact EBITDA Margin is projected to slightly decrease based on the last few years of reporting. The past year's EBITDA Margin was at 0.17

Genpact 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 Genpact. 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)
Revenues2.74 B3 B3.52 B3.71 B4.02 B3.69 B
Total Assets3.45 B3.53 B4.45 B4.87 B4.98 B4.59 B
Current Assets1.43 B1.36 B1.55 B1.75 B1.92 B1.8 B
Assets Non Current2.02 B2.17 B2.9 B3.12 B3.05 B2.79 B
Total Liabilities2.02 B2.13 B2.77 B3.04 B3.08 B2.74 B
Current Liabilities838.78 M976.31 M910.21 M1.2 B1.31 B1.15 B
Total Debt1.22 B1.3 B1.8 B1.94 B1.97 B1.69 B
Debt Current209.23 M328.48 M161.17 M340.02 M445.02 M353.05 M
Debt Non Current1.01 B975.64 M1.64 B1.6 B1.52 B1.34 B
Operating Income331.28 M348.15 M429.38 M438.72 M509 M468.74 M
Investments6.68 M4.8 M886 K836 K752.4 K772.2 K

About Genpact Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Genpact's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Genpact using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Genpact 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.
Genpact Limited provides business process outsourcing and information technology services in India, rest of Asia, North and Latin America, and Europe. The company was founded in 1997 and is based in Hamilton, Bermuda. Genpact operates under Information Technology Services classification in the United States and is traded on New York Stock Exchange. It employs 109600 people.

Genpact Investors Sentiment

The influence of Genpact'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 Genpact. 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.

Genpact Implied Volatility

    
  34.22  
Genpact's implied volatility exposes the market's sentiment of Genpact stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Genpact'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 Genpact stock will not fluctuate a lot when Genpact'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 Genpact 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, Genpact's short interest history, or implied volatility extrapolated from Genpact options trading.

Current Sentiment - G

Genpact Investor Sentiment

More than half of Macroaxis users are currently bullish on Genpact. What is your judgment towards investing in Genpact? Are you bullish or bearish?
Bullish
Bearish
98% Bullish
2% Bearish

Becoming a Better Investor with Macroaxis

Macroaxis puts the power of mathematics on your side. We analyze your portfolios and positions such as Genpact using complex mathematical models and algorithms, but make them easy to understand. There is no real person involved in your portfolio analysis. We perform a number of calculations to compute absolute and relative portfolio volatility, correlation between your assets, value at risk, expected return as well as over 100 different fundamental and technical indicators.

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Please check Genpact Piotroski F Score and Genpact Altman Z Score analysis. Note that the Genpact information on this page should be used as a complementary analysis to other Genpact'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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When running Genpact price analysis, check to measure Genpact'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 Genpact is operating at the current time. Most of Genpact's value examination focuses on studying past and present price action to predict the probability of Genpact's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Genpact's price. Additionally, you may evaluate how the addition of Genpact to your portfolios can decrease your overall portfolio volatility.
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Is Genpact'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 Genpact. If investors know Genpact 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 Genpact 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 YOY
0.085
Market Capitalization
B
Quarterly Revenue Growth YOY
0.13
Return On Assets
0.0659
Return On Equity
0.21
The market value of Genpact is measured differently than its book value, which is the value of Genpact that is recorded on the company's balance sheet. Investors also form their own opinion of Genpact's value that differs from its market value or its book value, called intrinsic value, which is Genpact'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 Genpact's market value can be influenced by many factors that don't directly affect Genpact'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 Genpact's value and its price as these two are different measures arrived at by different means. Investors typically determine Genpact value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Genpact'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.