Investors Title Co (Investors Title Co) Beneish M-Score

: -2.53 (As of Today)

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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.

Good Sign:

Beneish M-Score -2.53 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ITIC' s Beneish M-Score Range Over the Past 10 Years
Min: -2.95 Med: -2.46 Max: -1.99
Current: -2.53

During the past 13 years, the highest Beneish M-Score of Investors Title Co was -1.99. The lowest was -2.95. And the median was -2.46.

Investors Title Co 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 Investors Title Co 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 * 0.9204

0.528 * 1

0.404 * 0.8821

0.892 * 0.7931

0.115 * 1.0618

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1335

4.679 * 0.040141

0.327 * 0.7307

-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 (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $15.4 Mil.
Revenue was 53.683 + 61.41 + 58.314 + 51.343 = $224.8 Mil.
Gross Profit was 53.683 + 61.41 + 58.314 + 51.343 = $224.8 Mil.
Total Current Assets was $213.5 Mil.
Total Assets was $330.6 Mil.
Property, Plant and Equipment(Net PPE) was $30.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.1 Mil.
Selling, General, & Admin. Expense(SGA) was $76.7 Mil.
Total Current Liabilities was $31.9 Mil.
Long-Term Debt & Capital Lease Obligation was $6.4 Mil.
Net Income was 5.836 + 7.084 + 7.585 + 1.181 = $21.7 Mil.
Non Operating Income was 0.344 + 0.257 + 0.25 + 0.14 = $1.0 Mil.
Cash Flow from Operations was 14.149 + 0.702 + 5.667 + -13.092 = $7.4 Mil.

Total Receivables was $21.1 Mil.
Revenue was 65.494 + 77.998 + 70.902 + 68.998 = $283.4 Mil.
Gross Profit was 65.494 + 77.998 + 70.902 + 68.998 = $283.4 Mil.
Total Current Assets was $214.0 Mil.
Total Assets was $339.8 Mil.
Property, Plant and Equipment(Net PPE) was $24.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.6 Mil.
Selling, General, & Admin. Expense(SGA) was $85.3 Mil.
Total Current Liabilities was $47.1 Mil.
Long-Term Debt & Capital Lease Obligation was $6.8 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)
	=	(15.397 / 224.75)	/	(21.093 / 283.392)
	=	0.068507	/	0.07443
	=	0.9204

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)
	=	(283.392 / 283.392)	/	(224.75 / 224.75)
	=	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 - (213.499 + 30.189) / 330.559)	/	(1 - (214.042 + 24.492) / 339.757)
	=	0.2628	/	0.297928
	=	0.8821

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
	=	224.75	/	283.392
	=	0.7931

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))
	=	(3.58 / (3.58 + 24.492))	/	(4.121 / (4.121 + 30.189))
	=	0.127529	/	0.120111
	=	1.0618

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)
	=	(76.706 / 224.75)	/	(85.331 / 283.392)
	=	0.341295	/	0.301106
	=	1.1335

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)
	=	((6.449 + 31.864) / 330.559)	/	((6.839 + 47.05) / 339.757)
	=	0.115904	/	0.15861
	=	0.7307

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
	=	(21.686 - 0.991	-	7.426)	/	330.559
	=	0.040141

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.

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

Investors Title Co Beneish M-Score Related Terms

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Investors Title Co (Investors Title Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Investors Title Co (NAS:ITIC) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

121 North Columbia Street, Chapel Hill, NC, USA, 27514

Website

https://www.invtitle.com

Investors Title Co along with its subsidiaries is engaged in the issuance of residential and commercial title insurance through ITIC and NITIC. It also provides tax-deferred real property exchange services, investment management, and trust services, and management services to title insurance agencies. The company generates its revenue from interest and dividends.

Executives

James E Scott	director	121 NORTH COLUMBIA STREET, CHAPEL HILL NC 27514
Parker, Jr. Elton C.	director	121 N COLUMBIA STREET, P O DRAWER 2687, CHAPEL HILL NC 27514
Tammy Coley	director	121 N COLUMBIA STREET, P O DRAWER 2687, CHAPEL HILL NC 27514
Fine James A Jr	director, officer: President, Treasurer
Markel Gayner Asset Management Corp	10 percent owner	4521 HIGHWOODS PKWY, GLEN ALLEN VA 23060
Timothy B Murphy	officer: Chief Executive Officer	230 BROADWAY, LYNNFIELD MA 01940
Markel Corp	10 percent owner	4521 HIGHWOODS PKWY, GLEN ALLEN VA 23060
Markel American Insurance Co	10 percent owner	4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060
Essex Insurance Co	10 percent owner
Evanston Insurance Co	10 percent owner
R Horace Johnson	director	3317 LANDOR ROAD, RALEIGH NC 27609
Speed James H. Jr.	director	11032 BRASS KETTLE ROAD, RALEIGH NC 27614
Hutson Richard M Ii	director	PO BOX 2687, CHAPEL HILL NC 27515
W Morris Fine	director, officer: Executive Vice President
J Allen Fine	director, 10 percent owner, officer: Chief Executive Officer	121 NORTH COLUMBIA ST, INVESTORS TITLE CO, CHAPEL HILL NC 97514