National Insurance Co (XPAE:NIC) Beneish M-Score : -2.41 (As of May. 27, 2024)

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What is National Insurance Co 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 -2.41 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

XPAE:NIC' s Beneish M-Score Range Over the Past 10 Years
Min: -7.29 Med: -2.34 Max: -1.47
Current: -2.41

During the past 13 years, the highest Beneish M-Score of National Insurance Co was -1.47. The lowest was -7.29. And the median was -2.34.

National Insurance 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 National Insurance 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 * 1.032

0.528 * 1

0.404 * 1.0112

0.892 * 0.8362

0.115 * 0.8944

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0

4.679 * -0.008129

0.327 * 0.8074

-2.41

* 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 $0.53 Mil.
Revenue was 11.659 + 11.236 + 11.506 + 11.038 = $45.44 Mil.
Gross Profit was 11.659 + 11.236 + 11.506 + 11.038 = $45.44 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $110.60 Mil.
Property, Plant and Equipment(Net PPE) was $5.30 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.74 Mil.
Selling, General, & Admin. Expense(SGA) was $0.00 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $0.84 Mil.
Net Income was 0.974 + -0.277 + -0.249 + -1.103 = $-0.66 Mil.
Non Operating Income was -0.724 + -0.639 + -0.044 + 0.023 = $-1.38 Mil.
Cash Flow from Operations was 1.498 + 0.377 + 1.688 + -1.935 = $1.63 Mil.

Total Receivables was $0.61 Mil.
Revenue was 15.611 + 12.782 + 13.447 + 12.499 = $54.34 Mil.
Gross Profit was 15.611 + 12.782 + 13.447 + 12.499 = $54.34 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $97.66 Mil.
Property, Plant and Equipment(Net PPE) was $5.71 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.70 Mil.
Selling, General, & Admin. Expense(SGA) was $1.67 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $0.92 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)
	=	(0.529 / 45.439)	/	(0.613 / 54.339)
	=	0.011642	/	0.011281
	=	1.032

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)
	=	(54.339 / 54.339)	/	(45.439 / 45.439)
	=	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 + 5.304) / 110.595)	/	(1 - (0 + 5.709) / 97.659)
	=	0.952041	/	0.941541
	=	1.0112

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
	=	45.439	/	54.339
	=	0.8362

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))
	=	(0.703 / (0.703 + 5.709))	/	(0.741 / (0.741 + 5.304))
	=	0.109638	/	0.122581
	=	0.8944

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 / 45.439)	/	(1.667 / 54.339)
	=	0	/	0.030678
	=	0

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)
	=	((0.844 + 0) / 110.595)	/	((0.923 + 0) / 97.659)
	=	0.007631	/	0.009451
	=	0.8074

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
	=	(-0.655 - -1.384	-	1.628)	/	110.595
	=	-0.008129

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.

National Insurance Co has a M-score of -2.41 suggests that the company is unlikely to be a manipulator.

National Insurance Co Beneish M-Score Related Terms

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National Insurance Co (XPAE:NIC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » National Insurance Co (XPAE:NIC) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Alwataneyyeh Tour Building, P.O. Box 1819, Al Bireh, PSE

Website

https://www.nic-pal.com

National Insurance Co is an insurance company. The company provides motor, property, marine, engineering, specialized and personal insurance.