Atlantic American (Atlantic American) Beneish M-Score : -2.43 (As of Apr. 26, 2024)

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What is Atlantic American 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 -2.43 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

AAME' s Beneish M-Score Range Over the Past 10 Years
Min: -2.67 Med: -2.44 Max: -2.19
Current: -2.43

During the past 13 years, the highest Beneish M-Score of Atlantic American was -2.19. The lowest was -2.67. And the median was -2.44.

Atlantic American 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 Atlantic American 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 * 1.0907

0.528 * 1

0.404 * 0.9822

0.892 * 0.9944

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1

4.679 * -0.00737

0.327 * 0.9527

-2.43

* 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 $44.8 Mil.
Revenue was $186.8 Mil.
Gross Profit was $186.8 Mil.
Total Current Assets was $291.3 Mil.
Total Assets was $381.3 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.7 Mil.
Selling, General, & Admin. Expense(SGA) was $0.0 Mil.
Total Current Liabilities was $27.8 Mil.
Long-Term Debt & Capital Lease Obligation was $33.7 Mil.
Net Income was $-0.2 Mil.
Gross Profit was $0.0 Mil.
Cash Flow from Operations was $2.6 Mil.

Total Receivables was $41.3 Mil.
Revenue was $187.9 Mil.
Gross Profit was $187.9 Mil.
Total Current Assets was $278.9 Mil.
Total Assets was $367.1 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.9 Mil.
Selling, General, & Admin. Expense(SGA) was $0.0 Mil.
Total Current Liabilities was $28.5 Mil.
Long-Term Debt & Capital Lease Obligation was $33.7 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)
	=	(44.793 / 186.793)	/	(41.299 / 187.851)
	=	0.2398	/	0.21985
	=	1.0907

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)
	=	(187.851 / 187.851)	/	(186.793 / 186.793)
	=	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 - (291.313 + 0) / 381.265)	/	(1 - (278.891 + 0) / 367.064)
	=	0.23593	/	0.240212
	=	0.9822

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
	=	186.793	/	187.851
	=	0.9944

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))
	=	(0.89 / (0.89 + 0))	/	(0.652 / (0.652 + 0))
	=	1	/	1
	=	1

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 / 186.793)	/	(0 / 187.851)
	=	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)
	=	((33.738 + 27.83) / 381.265)	/	((33.738 + 28.482) / 367.064)
	=	0.161483	/	0.169507
	=	0.9527

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
	=	(-0.171 - 0.017	-	2.622)	/	381.265
	=	-0.00737

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.

Atlantic American has a M-score of -2.43 suggests that the company is unlikely to be a manipulator.

Atlantic American Beneish M-Score Related Terms

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Atlantic American (Atlantic American) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Atlantic American Corp (NAS:AAME) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

4370 Peachtree Road, N.E., Atlanta, GA, USA, 30319

Website

https://www.atlam.com

Atlantic American Corp operates in specialty markets within the life and health and property and casualty insurance industries. It provides property and casualty insurance including bodily injury and property damage liability coverage, uninsured motorist coverage, and physical damage coverage for commercial accounts. It also provides tailored business automobile insurance coverage, on a multi-year contract basis, to state governments and local municipalities. The company's life and health operations offer a variety of life and supplemental health products including ordinary and term life insurance, Medicare supplement, and other health insurance. It earns revenue from the collection of premiums and investment income.

Executives

Harriett J Robinson	director, 10 percent owner, other: Trustee under Rule 16a-8
Bankers Fidelity Life Insurance Co	other: Wholly owned subsidiary	4370 PEACHTREE ROAD NE, ATLANTA GA 30319
Jeffrey Ross Franklin	officer: CFO	4370 PEACHTREE ROAD NE, ATLANTA GA 30319
Mark E. Preisinger	director	C/O ATLANTIC AMERICAN CORPORATION, 4370 PEACHTREE ROAD, SUITE 200, ATLANTA GA 30319
D Keehln Wheeler	director	3731 WIEUCA ROAD, ATLANTA GA 30342
William H Whaley	director	3980 RANDALL MILL RD NW, ATLANTA GA 30327
Joseph M Scheerer	director	41 PARK AVENUE, APARTMENT #8H, NEW YORK NY 10016
Samuel E Hudgins	director
Edward E Elson	director
Dom H Wyant	director
J Mack Robinson	10 percent owner	4370 PEACHTREE RD, ATLANTA GA 30319
Robin Robinson Howell	director	3656 TUXEDO ROAD NW, ATLANTA GA 30305
Sample John G Jr	officer: Senior Vice President & CFO
Howell Hilton H Jr	director, officer: Chairman, President & CEO	4370 PEACHTREE ROAD, N.E., ATLANTA GA 30319
Scott G Thompson	director, officer: Pres & CEO Am. Sou. Ins. Co.