Tencent Music Entertainment Stock Beneish M Score

TME Stock  USD 11.41  0.10  0.87%   
This module uses fundamental data of Tencent Music to approximate the value of its Beneish M Score. Tencent Music 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 Tencent Music Piotroski F Score and Tencent Music Altman Z Score analysis.
  
At present, Tencent Music's Interest Debt Per Share is projected to slightly grow based on the last few years of reporting. At present, Tencent Music's Free Cash Flow Yield is projected to increase slightly based on the last few years of reporting. The current year's Stock Based Compensation To Revenue is expected to grow to 0.03, whereas Dividend Yield is forecasted to decline to 0.0005.
At this time, it appears that Tencent Music Entert is an unlikely manipulator. The earnings manipulation may begin if Tencent Music'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 Tencent Music 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 Tencent Music'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.
-2.63
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

0.96

Focus
Asset Quality

0.96

Focus
Expense Coverage

0.88

Focus
Gross Margin Strengs

0.74

Focus
Accruals Factor

0.88

Focus
Depreciation Resistance

1.43

Focus
Net Sales Growth

0.87

Focus
Financial Leverage Condition

0.28

Focus

Tencent Music 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 Tencent Music'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
Net Receivables2.4 B2.9 B
Fairly Down
Slightly volatile
Total Revenue24.2 B27.8 B
Fairly Down
Slightly volatile
Total Assets59 B75.5 B
Significantly Down
Slightly volatile
Total Current Assets24.1 B29.9 B
Significantly Down
Slightly volatile
Non Current Assets Total34.9 B45.6 B
Way Down
Slightly volatile
Property Plant Equipment3.9 B3.7 B
Sufficiently Up
Slightly volatile
Selling General Administrative3.1 B4.1 B
Way Down
Slightly volatile
Total Current Liabilities8.9 B12 B
Way Down
Slightly volatile
Non Current Liabilities Total3.6 B6.3 B
Way Down
Slightly volatile
Short Term Debt114.3 M115 M
Slightly Down
Pretty Stable
Operating Income3.6 B6.1 B
Way Down
Slightly volatile
Total Cash From Operating Activities5.5 B7.3 B
Way Down
Slightly volatile
Long Term Investments10.8 B19.8 B
Way Down
Slightly volatile
Gross Profit Margin0.260.3529
Way Down
Slightly volatile

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

About Tencent Music 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.

Other Operating Expenses

20.87 Billion

At present, Tencent Music's Other Operating Expenses is projected to increase significantly based on the last few years of reporting.

Tencent Music 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 Tencent Music. 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.
201920202021202220232024 (projected)
Net Receivables2.2B2.8B3.6B2.7B2.9B2.4B
Total Revenue25.4B29.2B31.2B28.3B27.8B24.2B
Total Assets52.7B68.3B67.3B67.0B75.5B59.0B
Total Current Assets26.9B31.7B26.8B26.6B29.9B24.1B
Net Debt(15.3B)(5.6B)(1.2B)(3.6B)(7.5B)(7.9B)
Short Term Debt69M103M92M123M115M114.3M
Operating Income4.6B4.7B2.8B4.4B6.1B3.6B
Investments(8.1B)(14.2B)(6.0B)(1.4B)(1.9B)(2.0B)
Gross Profit Margin0.380.340.320.30.310.26

Tencent Music ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Tencent Music's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Tencent Music's managers, analysts, and investors.
Environmental
Governance
Social

About Tencent Music Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Tencent Music Entertainment's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Tencent Music using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Tencent Music Entertainment 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.

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When determining whether Tencent Music Entert is a strong investment it is important to analyze Tencent Music's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Tencent Music's future performance. For an informed investment choice regarding Tencent Stock, refer to the following important reports:
Check out Tencent Music Piotroski F Score and Tencent Music Altman Z Score analysis.
You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Is Movies & Entertainment space 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 Tencent Music. If investors know Tencent 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 Tencent Music 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
0.351
Earnings Share
0.49
Revenue Per Share
18.009
Quarterly Revenue Growth
0.068
Return On Assets
0.0543
The market value of Tencent Music Entert is measured differently than its book value, which is the value of Tencent that is recorded on the company's balance sheet. Investors also form their own opinion of Tencent Music's value that differs from its market value or its book value, called intrinsic value, which is Tencent Music'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 Tencent Music's market value can be influenced by many factors that don't directly affect Tencent Music'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 Tencent Music's value and its price as these two are different measures arrived at by different means. Investors typically determine if Tencent Music is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Tencent Music'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.