GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Linea Directa Aseguradora SA (FRA:8I2) » Definitions » Beneish M-Score

Linea Directa Aseguradora (FRA:8I2) Beneish M-Score : -3.29 (As of Dec. 15, 2024)


View and export this data going back to 2021. Start your Free Trial

What is Linea Directa Aseguradora 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 -3.29 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

FRA:8I2' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Med: -2.92   Max: -2.54
Current: -3.29

During the past 4 years, the highest Beneish M-Score of Linea Directa Aseguradora was -2.54. The lowest was -3.29. And the median was -2.92.


Linea Directa Aseguradora 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 Linea Directa Aseguradora 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 * 0.1314+0.528 * 1+0.404 * 1.0011+0.892 * 1.0258+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0+4.679 * -0.059154-0.327 * 0.7944
=-3.29

* 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 €16.9 Mil.
Revenue was €966.8 Mil.
Gross Profit was €966.8 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €1,125.3 Mil.
Property, Plant and Equipment(Net PPE) was €45.1 Mil.
Depreciation, Depletion and Amortization(DDA) was €0.0 Mil.
Selling, General, & Admin. Expense(SGA) was €0.0 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €2.8 Mil.
Net Income was €-4.4 Mil.
Gross Profit was €-0.3 Mil.
Cash Flow from Operations was €62.5 Mil.
Total Receivables was €125.7 Mil.
Revenue was €942.5 Mil.
Gross Profit was €942.5 Mil.
Total Current Assets was €0.0 Mil.
Total Assets was €1,195.4 Mil.
Property, Plant and Equipment(Net PPE) was €49.1 Mil.
Depreciation, Depletion and Amortization(DDA) was €0.0 Mil.
Selling, General, & Admin. Expense(SGA) was €26.0 Mil.
Total Current Liabilities was €0.0 Mil.
Long-Term Debt & Capital Lease Obligation was €3.8 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)
=(16.933 / 966.762) / (125.656 / 942.48)
=0.017515 / 0.133325
=0.1314

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)
=(942.48 / 942.48) / (966.762 / 966.762)
=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 + 45.073) / 1125.322) / (1 - (0 + 49.107) / 1195.415)
=0.959947 / 0.958921
=1.0011

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
=966.762 / 942.48
=1.0258

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))
=(0.028 / (0.028 + 49.107)) / (0 / (0 + 45.073))
=0.00057 / 0
=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 / 966.762) / (26.043 / 942.48)
=0 / 0.027632
=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)
=((2.818 + 0) / 1125.322) / ((3.768 + 0) / 1195.415)
=0.002504 / 0.003152
=0.7944

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
=(-4.39 - -0.312 - 62.489) / 1125.322
=-0.059154

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.

Linea Directa Aseguradora has a M-score of -3.29 suggests that the company is unlikely to be a manipulator.


Linea Directa Aseguradora Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Linea Directa Aseguradora's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Linea Directa Aseguradora Business Description

Traded in Other Exchanges
Address
Calle de Isaac Newton 7, Tres Cantos, Madrid, ESP, 28760
Linea Directa Aseguradora SA is engaged in insurance and reinsurance activities in the motor, home, and other non-life segments. The company has five operating segments; The motor segment which derives maximum revenue, includes private motor insurance and motorbike insurance, The home segment includes multi-risk home insurance products with theft damage, civil liability, fire damage, aesthetic damage, etc, The health segment includes health insurance products under the Vivaz brand, The other insurance segment includes various products with stand-alone policies that are not linked to motor, home or health insurance, such as travel insurance for holders of credit cards and wellness insurance, and The other activities segment mainly relates to auxiliary insurance businesses and commissions.