Personal Group Holdings (LSE:PGH) Beneish M-Score : -4.53 (As of May. 09, 2024)

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What is Personal Group Holdings 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.

Good Sign:

Beneish M-Score -4.53 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LSE:PGH' s Beneish M-Score Range Over the Past 10 Years
Min: -7.35 Med: -4.56 Max: -2.94
Current: -4.53

During the past 13 years, the highest Beneish M-Score of Personal Group Holdings was -2.94. The lowest was -7.35. And the median was -4.56.

Personal Group Holdings 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 Personal Group Holdings 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 * 1.1628

0.528 * 1

0.404 * 1.0033

0.892 * 1.0041

0.115 * 1.0316

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.2504

4.679 * -0.45754

0.327 * 3.9154

-5.46

* 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 £16.03 Mil.
Revenue was £49.71 Mil.
Gross Profit was £49.71 Mil.
Total Current Assets was £0.00 Mil.
Total Assets was £49.19 Mil.
Property, Plant and Equipment(Net PPE) was £5.02 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.91 Mil.
Selling, General, & Admin. Expense(SGA) was £11.27 Mil.
Total Current Liabilities was £0.00 Mil.
Long-Term Debt & Capital Lease Obligation was £0.57 Mil.
Net Income was £4.32 Mil.
Gross Profit was £20.15 Mil.
Cash Flow from Operations was £6.68 Mil.

Total Receivables was £13.73 Mil.
Revenue was £49.51 Mil.
Gross Profit was £49.51 Mil.
Total Current Assets was £0.00 Mil.
Total Assets was £44.16 Mil.
Property, Plant and Equipment(Net PPE) was £4.64 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.84 Mil.
Selling, General, & Admin. Expense(SGA) was £8.97 Mil.
Total Current Liabilities was £0.00 Mil.
Long-Term Debt & Capital Lease Obligation was £0.13 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)
	=	(16.027 / 49.712)	/	(13.727 / 49.508)
	=	0.322397	/	0.277268
	=	1.1628

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)
	=	(49.508 / 49.508)	/	(49.712 / 49.712)
	=	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 - (0 + 5.02) / 49.187)	/	(1 - (0 + 4.639) / 44.164)
	=	0.897941	/	0.89496
	=	1.0033

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
	=	49.712	/	49.508
	=	1.0041

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))
	=	(1.838 / (1.838 + 4.639))	/	(1.905 / (1.905 + 5.02))
	=	0.283773	/	0.27509
	=	1.0316

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)
	=	(11.266 / 49.712)	/	(8.973 / 49.508)
	=	0.226625	/	0.181243
	=	1.2504

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)
	=	((0.567 + 0) / 49.187)	/	((0.13 + 0) / 44.164)
	=	0.011527	/	0.002944
	=	3.9154

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
	=	(4.324 - 20.151	-	6.678)	/	49.187
	=	-0.45754

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.

Personal Group Holdings has a M-score of -5.46 suggests that the company is unlikely to be a manipulator.

Personal Group Holdings Beneish M-Score Related Terms

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Personal Group Holdings (LSE:PGH) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Personal Group Holdings PLC (LSE:PGH) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

PGH.GB:UK

Address

899 Silbury Boulevard, John Ormond House, Milton Keynes, GBR, MK9 3XL

Website

https://www.personalgroup.com

Personal Group Holdings PLC is a UK-based insurance that provides benefits and services focused on improving employee health, well-being, and engagement. The group is principally engaged in providing short-term accident and health insurance and provide salary sacrifice technology products. It provides a range of employee benefits, from retail discounts to salary sacrifice schemes, including cycle to work, childcare vouchers, and home technology as well as a range of in-house insurance products such as hospital cash plan, death benefit, and convalescence cover. The company manages its business into four reportable segments namely Pay & Reward, Benefits Platform, Affordable Insurance, and Other owned benefits.