Switch to:
GuruFocus has detected 2 Warning Signs with Navigators Group Inc $NAVG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Navigators Group Inc (NAS:NAVG)
Beneish M-Score
-2.54 (As of Today)

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.

Navigators Group Inc has a M-score of -2.54 suggests that the company is not a manipulator.

NAVG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.68   Max: -2.19
Current: -2.54

-3.68
-2.19

During the past 13 years, the highest Beneish M-Score of Navigators Group Inc was -2.19. The lowest was -3.68. And the median was -2.54.


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 Navigators Group Inc 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 * 0.968+0.528 * 1+0.404 * 1+0.892 * 1.1308+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1229+4.679 * -0.0294-0.327 * 0.9528
=-2.54

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $327 Mil.
Revenue was 310.04 + 305.288 + 294.107 + 288.098 = $1,198 Mil.
Gross Profit was 310.04 + 305.288 + 294.107 + 288.098 = $1,198 Mil.
Total Current Assets was $0 Mil.
Total Assets was $4,814 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $5 Mil.
Selling, General & Admin. Expense(SGA) was $165 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $264 Mil.
Net Income was 21.591 + 22.013 + 16.19 + 22.932 = $83 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 37.208 + 72.471 + 76 + 38.548 = $224 Mil.
Accounts Receivable was $299 Mil.
Revenue was 272.111 + 268.178 + 258.477 + 260.223 = $1,059 Mil.
Gross Profit was 272.111 + 268.178 + 258.477 + 260.223 = $1,059 Mil.
Total Current Assets was $0 Mil.
Total Assets was $4,584 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $5 Mil.
Selling, General & Admin. Expense(SGA) was $130 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $264 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)
=(327.242 / 1197.533) / (298.939 / 1058.989)
=0.27326345 / 0.28228716
=0.968

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)
=(1058.989 / 1058.989) / (1197.533 / 1197.533)
=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) / 4814.037) / (1 - (0 + 0) / 4584.012)
=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
=1197.533 / 1058.989
=1.1308

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))
=(5.386 / (5.386 + 0)) / (5.429 / (5.429 + 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)
=(165.045 / 1197.533) / (129.977 / 1058.989)
=0.13782084 / 0.12273687
=1.1229

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)
=((263.728 + 0) / 4814.037) / ((263.58 + 0) / 4584.012)
=0.05478313 / 0.05749985
=0.9528

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
=(82.726 - 0 - 224.227) / 4814.037
=-0.0294

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.

Navigators Group Inc has a M-score of -2.54 suggests that the company will not 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 local exchange's currency.

Navigators Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

Navigators Group Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.78830.94320.86170.93690.96770.80930.85330.83560.83670.968
GMI 1111111111
AQI 1111111111
SGI 1.11731.11551.08571.06481.01751.03461.05461.07981.11661.1308
DEPI 1111111111
SGAI 0.96410.99151.08491.06511.06021.00080.9621.00921.03011.1229
LVGI 2.09940.93190.9520.97290.97150.9770.96270.92790.93910.9528
TATA -0.0219-0.0284-0.0255-0.0113-0.0256-0.032-0.0411-0.054-0.0361-0.0294
M-score -3.03-2.54-2.65-2.54-2.61-2.77-2.74-2.79-2.68-2.54
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK