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Enstar Group Ltd (NAS:ESGR)
Beneish M-Score
-0.99 (As of Today)

Warning Sign:

Beneish M-Score -0.99 higher than -2.22, which implies that it might have manipulated its financial results.

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Enstar Group Ltd has a M-score of -0.99 signals that the company is a manipulator.

ESGR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.06   Max: 1.08
Current: -0.99

-3.06
1.08

During the past 13 years, the highest Beneish M-Score of Enstar Group Ltd was 1.08. The lowest was -3.06. And the median was -1.44.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Enstar Group Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 2.1268+0.528 * 1+0.404 * 1+0.892 * 1.1554+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8935+4.679 * 0.0572-0.327 * 0.9196
=-0.99

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $416 Mil.
Revenue was 330.429 + 315.196 + 217.633 + 268.067 = $1,131 Mil.
Gross Profit was 330.429 + 315.196 + 217.633 + 268.067 = $1,131 Mil.
Total Current Assets was $0 Mil.
Total Assets was $12,659 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $51 Mil.
Selling, General & Admin. Expense(SGA) was $409 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $614 Mil.
Net Income was 40.594 + 45.52 + 111.857 + 49.042 = $247 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -54.244 + -162.088 + -201.907 + -59.406 = $-478 Mil.
Accounts Receivable was $169 Mil.
Revenue was 256.398 + 287.299 + 223.019 + 212.436 = $979 Mil.
Gross Profit was 256.398 + 287.299 + 223.019 + 212.436 = $979 Mil.
Total Current Assets was $0 Mil.
Total Assets was $12,332 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $87 Mil.
Selling, General & Admin. Expense(SGA) was $397 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $651 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(416.354 / 1131.325) / (169.434 / 979.152)
=0.36802334 / 0.17304157
=2.1268

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)
=(979.152 / 979.152) / (1131.325 / 1131.325)
=1 / 1
=1

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (0 + 0) / 12659.166) / (1 - (0 + 0) / 12332.36)
=1 / 1
=1

4. SGI = Sales Growth Index

Ratio of sales 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
=1131.325 / 979.152
=1.1554

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(87.014 / (87.014 + 0)) / (51.217 / (51.217 + 0))
=1 / 1
=1

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(409.364 / 1131.325) / (396.553 / 979.152)
=0.36184474 / 0.40499636
=0.8935

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((614.03 + 0) / 12659.166) / ((650.507 + 0) / 12332.36)
=0.04850478 / 0.05274797
=0.9196

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
=(247.013 - 0 - -477.645) / 12659.166
=0.0572

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Enstar Group Ltd has a M-score of -0.99 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Enstar Group Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.21620.54381.04962.45420.21071.922.5150.8145
GMI 11111111
AQI 11111111
SGI 1.17512.03031.33770.82611.45432.54862.06331.1976
DEPI 11111111
SGAI 3.53360.51830.94541.34150.66810.52770.80880.9466
LVGI 00.68040.76630.78430.49742.87190.61361.5751
TATA -0.00490.03060.090.1610.06050.0314-0.02860.0811
M-score -2.26-1.65-1.63-0.53-2.30-0.64-0.11-2.27

Enstar Group Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.58472.5150.841.01794.56760.81453.36432.1268
GMI 11111111
AQI 11111111
SGI 2.39342.06332.20641.43881.34411.19761.03731.1554
DEPI 11111111
SGAI 0.67640.80880.80261.0190.9720.94660.96890.8935
LVGI 0.73280.61360.67061.45021.94031.57511.20930.9196
TATA -0.025-0.0286-0.0070.04030.05740.08110.07030.0572
M-score -1.59-0.11-1.44-2.031.08-2.27-0.01-0.99
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