Gainsco (Gainsco) Beneish M-Score : 0.00 (As of Apr. 25, 2024)

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What is Gainsco Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

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.

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

During the past 13 years, the highest Beneish M-Score of Gainsco was 0.00. The lowest was 0.00. And the median was 0.00.

Gainsco 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 Gainsco 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 * 0.7901

0.528 * 1

0.404 * 1.2395

0.892 * 1.0854

0.115 * 0.6474

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1

4.679 * 0.003613

0.327 * 1.0103

-2.53

* 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.

This Year (Dec09) TTM:

Last Year (Dec08) TTM:

Total Receivables was $34.2 Mil.
Revenue was $206.8 Mil.
Gross Profit was $206.8 Mil.
Total Current Assets was $78.3 Mil.
Total Assets was $241.9 Mil.
Property, Plant and Equipment(Net PPE) was $1.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.6 Mil.
Selling, General, & Admin. Expense(SGA) was $0.0 Mil.
Total Current Liabilities was $16.1 Mil.
Long-Term Debt & Capital Lease Obligation was $43.0 Mil.
Net Income was $4.1 Mil.
Gross Profit was $-0.4 Mil.
Cash Flow from Operations was $3.6 Mil.

Total Receivables was $39.8 Mil.
Revenue was $190.5 Mil.
Gross Profit was $190.5 Mil.
Total Current Assets was $107.3 Mil.
Total Assets was $239.5 Mil.
Property, Plant and Equipment(Net PPE) was $2.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.8 Mil.
Selling, General, & Admin. Expense(SGA) was $0.0 Mil.
Total Current Liabilities was $14.9 Mil.
Long-Term Debt & Capital Lease Obligation was $43.0 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)
	=	(34.162 / 206.815)	/	(39.836 / 190.534)
	=	0.165181	/	0.209076
	=	0.7901

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)
	=	(190.534 / 190.534)	/	(206.815 / 206.815)
	=	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 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 - (78.278 + 1.764) / 241.902)	/	(1 - (107.265 + 2.936) / 239.483)
	=	0.669114	/	0.539838
	=	1.2395

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
	=	206.815	/	190.534
	=	1.0854

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))
	=	(1.831 / (1.831 + 2.936))	/	(2.573 / (2.573 + 1.764))
	=	0.384099	/	0.593267
	=	0.6474

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)
	=	(0 / 206.815)	/	(0 / 190.534)
	=	0	/	0
	=	1

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)
	=	((43 + 16.083) / 241.902)	/	((43 + 14.898) / 239.483)
	=	0.244244	/	0.241762
	=	1.0103

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
	=	(4.073 - -0.439	-	3.638)	/	241.902
	=	0.003613

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.

Gainsco has a M-score of -2.53 suggests that the company is unlikely to be a manipulator.

Gainsco Beneish M-Score Related Terms

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Gainsco (Gainsco) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Gainsco Inc (OTCPK:GANS) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

3333 Lee Parkway, Suite 1200, Dallas, TX, USA, 75219-5134

Website

http://www.gainsco.com

Gainsco Inc is a United States-based property and casualty insurance holding company. It focuses on the non-standard personal automobile market, specializing in minimum-limits personal auto insurance. The company's insurance brand is GAINSCO Auto Insurance. It sells the insurance policies through independent partner agents and website comparison shopping places.

Executives

Robert J Boulware	director	101 JEFFERSON DRIVE, MENLO PARK CA 94025
Sam Rosen	other: Former Director	4428 RIVERIDGE DRIVE, FORT WORTH TX 76109
Robert W Stallings	director, 10 percent owner, officer: Executive Chairman	5242 BUENA VISTA DRIVE, FRISCO TX 75034
John C Goff	director, 10 percent owner	500 COMMERCE STREET, SUITE 700, FORT WORTH TX 76102
James Richard Reis	10 percent owner, officer: Executive Vice President	3333 LEE PARKWAY, SUITE 1200, DALLAS TX 75219